Brexit effect will lower wages by nearly £500 for a decade and devastate Scottish fishing industry



Scottish workers will see their real pay hit by £500 each year of this decade because of the economic effects of Brexit, economic experts have warned.

Brexit will damage the UK’s competitiveness, hit productivity and dampen workers’ wages for years to come, according to a damning new report.

On average UK workers will lose £470 a year more than they would if Britain had opted to stay inside the EU, according to the influential Resolution Foundation think tank.

The report, in collaboration with the London School of Economics, said quitting the EU would make Britain “poorer” during the 2020s and lead to “painful adjustments” for the Scottish fishing industry.

The immediate impact of the referendum result has been clear, with a “depreciation-driven inflation spike” increasing the cost of living for households, and seeing business investment falling, said the report.

The research estimated that labor productivity will be reduced by 1.3 per cent by the end of the decade through changes in trading rules, contributing to weaker wage growth.

Output of the fishing industry, which is largely based in Scotland, is expected to decline by 30 per cent and some workers will face “painful adjustments”, said the foundation.

Sophie Hale, principal economist at the Resolution Foundation, said: “Brexit represents the biggest change to Britain’s economic relationship with the rest of the world in half a century.”

“Some sectors – including fisheries – still face significant change to come in the years ahead, but the overall services-led nature of the UK economy will remain largely unaffected.”

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The report added that the North East of England, an area which voted significantly for Leave, is expected to be hit hardest by Brexit as its firms are particularly reliant on exports to the EU.

The report said Britain had experienced a decline of 8 per cent in “trade openness” – trade as a share of economic output – since 2019, losing market share across three of its largest non-EU goods import markets in 2021, the US, Canada and Japan.

It follows a recent study by the Center for European Reform (CEF) which found Brexit was “largely to blame” for billions being lost in trade and tax revenues in recent years.

The think tank said that by the end of last year, Britain’s economy was 5.2 per cent – ​​or £31 billion – smaller than it would have been without Brexit and the Covid pandemic.

John Springford, author of the CEF study, said: “We can’t blame Brexit for all of the 5.2 per cent GDP shortfall, but it’s apparent that Brexit is largely to blame.”

Ian Blackford, the SNP Westminster leader, referred to the report findings at Prime Minister’s Questions.

He said: The report could not be clearer. The Tory government’s disastrous Brexit is driving wages down an will make us poorer over the decade. Instead of reversing course the Prime Minister recklessly threatening a trade war as a worst possible time.”

The Prime Minister said no one wanted a trade war with the EU and said the UK had record venture capital investment with the benefits being felt across the UK.

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A Government spokesperson said: “Since we left the European Union, we have begun seizing new opportunities to improve UK regulation for businesses and consumers through plans to enhance competition and harness new technology.”

“Exports and imports to and from the EU increased in the three months to April 2022, and are now above pre-pandemic levels.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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