A HARD Brexit will hurt Aberdeen more than any other city in the UK, according to a new study.
The research was carried out at the think tank Centre for Cities and the Centre for Economic Performance (CEP), at the London School of Economics.
They analysed the potential impact of both a “hard” and “soft” Brexit on British cities in the 10 years following the implementation of new trade arrangements with the EU.
Economic output in cities is predicted to be 1.2 per cent lower on average under a soft Brexit scenario in which the UK joins a free trade area with the EU and 2.3 per cent lower under a hard Brexit where such an area is not immediately in place and the default is World Trade Organisation rules, in comparison to the UK remaining in the EU, the report states.
Aberdeen, where around 60 per cent of voters backed staying in the EU, tops the list for worst affected city in both scenarios, with output down 3.7 per cent under a hard Brexit and down 2.1 per cent under a soft Brexit.
Edinburgh would be the sixth worst affected, down 2.7 per cent, with London down 2.6 per cent.
The cities specialise in large “knowledge-intensive” sectors such as financial services, which the research shows will be most affected by the increase in tariff and non-tariff barriers that Brexit could bring.
Researchers also found that the most-affected cities were better placed to adapt to the economic shocks ahead than less affluent areas outside the South East, despite the latter being less directly affected.
In contrast, the cities least directly affected by either form of Brexit are mostly less prosperous places in the North, Midlands and Wales, according to the report.
Andrew Carter, chief executive of Centre for Cities, said: “Contrary to much of the received wisdom on Brexit, it is the most prosperous UK cities which will be hit hardest by the downturn ahead, but poorer places across the North and Midlands will find it tougher to adapt.
“First and foremost, the government should do all it can to minimise the coming economic shocks by securing the best possible trade deal with the EU. That means ensuring that our post-Brexit trading arrangements are as close to our current relationship with Europe as possible.
“But it’s also critical that the government uses its forthcoming industrial strategy to give cities across the country the investment, powers and responsibilities they need to make their economies as successful and competitive as possible.”
Kirsty Blackman, the MP for Aberdeen North, said: “Aberdeen, along with everywhere else in Scotland, firmly voted to remain in the European Union, so to discover we may be the worst affected city for something we didn’t even want in the first place is devastating.
“Not only does the UK Government want to pursue their agenda of taking Scotland out of the EU against the express wishes of the people of this country, we now find out that it is a major Scottish city that will be worse affected by even their best-case-scenario plans.
“These figures should make for sobering reading for the newly elected Tory MP in Aberdeen South who was at the forefront of the Vote Leave campaign.”
A Scottish Government spokesperson said: “This report further confirms the damage which taking us out of the EU is likely to do to our economy – and the threat of an extreme Brexit, outside the single market and customs union will undoubtedly cause severe long-term economic damage, hitting jobs, growth and living standards.
“People in Scotland voted overwhelmingly to remain in the EU and we have set out proposals for how our place in the single market could be retained.
“We will continue to push for a seat at the negotiating table so that we do all we can to protect Scotland’s interests and to try to mitigate the damage that Brexit will cause.”
Labour’s Shadow Scottish Secretary Lesley Laird said this was proof of the “reckless” gamble of Brexit: “The absolute priority for our economy now is to ensure we secure an alternative to Theresa May’s damaging Brexit plans.
“Jobs, the economy and retaining the benefits of the single market and the customs union are our top priority.”
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