Aberdeen’s economy will take the biggest hit in the UK from both a hard or a soft Brexit, new research shows.
A report from thinktank the Centre for Cities has compared the economic impact of a hard Brexit, without a free trade agreement, or a soft Brexit, where the UK maintains free trade agreements, on every city in the country.
The analysis showed Aberdeen would be hit harder than any other city in the UK in both scenarios because of its oil industry.
Opponents of Brexit said the report was proof the current plans were reckless and unnecessary self-harm, and even a “technicoloured dream Brexit” would damage Aberdeen, while the UK’s Brexit department claimed they had bold and ambitious plans for a free trade deal.
Centre for Cities chief executive Andrew Carter said any form of Brexit would damage Aberdeen’s economy, but a hard Brexit would be twice as damaging as a soft Brexit.
He said: “Aberdeen is set to see the biggest reduction in economic output because of the dominance of the oil industry in the city’s economy, and the financial and business services which support this sector, which will be hit hard by the tariffs and border controls that Brexit could bring.
“The challenge for Aberdeen will be to diversify it industrial structure in the years ahead, so that it is less reliant on one sector. This will be crucial for the city to thrive after we leave the EU.
“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.”
Mr Carter added Aberdeen and other wealthier cities may find it easier to bounce back and diversify than poorer cities due to more innovative business bases and higher skilled populations.
But Aberdeen-based Anderson Construction managing director Kenny Anderson said Brexit would be “shooting both barrels into both feet”.
He said: “We have to stop Brexit in its tracks — I can’t believe we’re falling into this huge trap.
“Many of our strengths are being dismantled, because Aberdeen is not just reliant on exports to the EU but has low-tariff access to countries like south America, South Africa and the Far East due to EU treaties.
“These areas are growth areas for oil and gas and also our food and drink and whisky sectors and access will become more difficult.
“No UK commercial sector will come out of Brexit well, not even fishing as it relies on exporting to the EU too.”
Aberdeen North MP Kirsty Blackman, SNP Westminster depute leader and economy spokeswoman, said it was devastating to see even the best-case scenario would be a body blow to the Granite City.
She 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 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 worst 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.
“Ross Thomson must now explain to his constituents why he put so much effort into campaigning for a cause which looks set to directly hurt this city and its economic output.
“The Tories still haven’t moved oil and gas from a low to high priority in Brexit negotiations, and we can now see that this terrible judgement is likely to be a body blow to our local economy.”
Scottish Lib Dem leader Willie Rennie said Brexit would be a bombshell for the north-east and must be reversed.
He said: “This report is nothing short of a bombshell for the north-east. “Instead of a land of milk and honey that was so enthusiastically promised by the Brexiteers the north-east of Scotland is going to be hit hardest, whether it be a hard or soft Brexit.
“Even if there was a technicoloured dream Brexit then we would still see a significant negative impact in the north-east.
“People last year did not vote for this and it would be wrong for the UK Government to perform such a stitch-up in the north-east. It does not have to be like this. It’s for that very reason that we should give people a chance to exit from Brexit.”
A UK Government spokesperson said: “We are committed to a bold and ambitious Free Trade Agreement that works for the whole of the UK.
“The Government is engaging extensively with businesses and organisations across the country, and will continue this work throughout the exit process.
“Through the Government’s modern Industrial Strategy we will look to build on the diverse strengths of all of the UK’s cities and regions.”
