Scottish Labour: Brexit could lead to £2.3bn block grant cut
Scotland's block grant could be cut by up to £2.3 billion by 2019/20 if the UK leaves the European Union, Scottish Labour has claimed.
Scotland's block grant could be cut by up to £2.3 billion by 2019/20 if the UK leaves the European Union, Scottish Labour has claimed.
The cuts are over and above those which public services will face in the next four years, the party said.
Scottish party leader Kezia Dugdale said: “Being part of the EU is good for Scotland's economy.
“Hundreds of thousands of Scottish jobs are linked to our trade with the EU and a Leave vote on Thursday would put that at risk.
“Anything that damages our economy damages our public services, because there will be less money to spend on schools and the NHS.
“A Leave vote could mean extra cuts of up to £2.3 billion. We can't afford even more austerity with Brexit.”
Labour's warning used analysis by the Institute for Fiscal Studies (IFS) which states that leaving the EU would lead to lower growth in the UK economy and a rise in public-sector borrowing.
The think-tank calculated the UK deficit for 2019/20 could be up to £28 billion.
If the UK Government tackled this deficit with public spending cuts rather than tax rises, in order to reach its goal of a budget surplus by 2019/20, then Scotland would see its share of the budget drop by up to £2.3 billion, or 8.5%, Scottish Labour said.
Meanwhile, the Confederation of British Industry (CBI) has highlighted figures from the Treasury which state there is the potential to create 70,800 jobs in Scotland if the UK remains in the EU.
The CBI said as many as 250,000 jobs in Scotland are currently linked to exports to the single market in areas such as manufacturing, retail and banking.
CBI Scotland director Hugh Aitken said: The UK's membership of the European Union has been of enormous benefit to Scotland for over 40 years.
“Some of the key sectors that lie at the heart of communities across the region, from manufacturing to retail, rely on our membership of the single market.
“Virtually every economist agrees that leaving the EU would likely cause an economic shock, damaging Scotland's prospects.”
Ross Thomson, Scottish Conservative MSP and Vote Leave campaigner, said: “This is yet more negativity and doom and gloom from the Remain side.
“I have more faith in the Scottish economy and the opportunities a vote for leave will bring.
“Not even the CBI can deny that the UK could thrive outside the EU.
“In fact our economy would do far better not being tied to a failing eurozone, which has seen no growth, costing Scotland £ 30 million every single week.”