CRASHING out of the European Union without a trade deal would have “stark, catastrophic and unavoidable” economic consequences, the Principal of Glasgow University Professor Anton Muscatelli has warned.
The respected macroeconomist urged Theresa May’s Government to avoid a “cliff-edge” Brexit regardless of the personal political costs.
The Prime Minister has said that the UK would plump for no deal over a bad deal with the EU, even if that meant relying on World Trade Organisation (WTO) rules and tariffs.
Prof Muscatelli, who chairs the Scottish Government’s Standing Council on Europe, warned that option could cost the UK economy as much as 9.4 per cent of GDP by 2030 according to some forecasts.
“If this is the route the UK is forced to take, the economic consequences would be stark, catastrophic and unavoidable,” he said.
In a speech at Glasgow University’s Bute Hall, he also challenged public figures to extol the benefits of migration to the economy in a bid to avert a ‘hard’ Brexit.
A significant fall in the number of EU citizens in Scotland after Brexit could “severely” affect the tax base and limit the amount of money Holyrood has to spend, he said.
Mrs May has said that she will hand the EU divorce papers next week.
The delivery will trigger Article 50 of the Lisbon Treaty and start the clock ticking on, at most, two years of negotiations.
Mrs May has said that she intends to get the best deal for the UK.
She has ruled out what Prof Muscatelli called a ‘European single market Brexit’ , but he predicted that option 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,” he said.
He added: “The challenge now is for politicians and public figures from across the political spectrum to commit to extolling the virtues of migration, and refusing to let the public debate be poisoned by some of the negative rhetoric we’ve seen in recent months.
“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.”
Last week Brexit Secretary David Davis told MPs he was confident that no deal would be better than a bad deal with the EU, despite admitting that his department had not carried out an economic assessment.
Meanwhile, it emerged that banking giant Goldman Sachs will start to relocate staff from London to EU offices within 18 months as part of its contingency plans for Brexit.
New research also suggests that voters want a Brexit that is hard on the outside “but soft in the middle”.
Prof John Curtice, Senior Research Fellow at NatCen, which carried out the survey of more than 2,000 people, said: “For the most part, Remain and Leave voters are not at loggerheads on the kind of Brexit they would like to see. Many Remain voters would like to see an end to the less popular parts of Britain’s current membership of the EU, while many Leave voters would like to retain the seemingly more desirable parts, such as free trade, cheap mobile phone calls, and clean beaches.
"This is perhaps typical of the pick and mix attitude to the EU that has characterised much of Britain’s relationship with the institution during its 44 years of membership so far.”
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