Nicola Sturgeon raises fears of consequences of 'hard Brexit'
The UK could be heading for a "hard rather than a soft Brexit", with Nicola Sturgeon raising fears this could leave the county with "limited access" to the single market and "significant restrictions" on free movement of people.
The Scottish First Minister also warned that efforts to keep the UK economy competitive outside of the European Union (EU) could spark a "race to the bottom" which would have "devastating" consequences for workers' rights.
She said a drive towards deregulation in the wake of June's Brexit vote could "open up rather than close down opportunities for tax avoidance and tax evasion".
Ms Sturgeon voiced her concerns as she addressed business leaders, charities and public-sector organisations at an event in Edinburgh hosted by the IPPR Scotland think-tank.
Although the UK as a whole voted to leave the EU last month, almost two-thirds (62%) of Scottish voters backed remain - a result which immediately prompted Ms Sturgeon to say a second Scottish independence referendum is now "highly likely".
While the Scottish Government has been exploring options to retain the country's links with Europe, Ms Sturgeon conceded there are "substantial" barriers towards achieving this as part of the UK's Brexit deal.
"I don't underestimate the challenge of finding such a solution," the SNP leader said.
"Even if we can agree a position at UK level, we would face the task of persuading the EU to agree it. The barriers are substantial."
She added that with the UK facing "uncertainty, upheaval and unpredictability", for Scotland it "may well be that the option that offers us the greatest certainty, stability and the maximum control over our own destiny is that of independence".
While the Leave vote has heralded the arrival of new Prime Minister Theresa May, Ms Sturgeon claimed the Tory's statement that "Brexit means Brexit" was "just a soundbite that masks a lack of any clear sense of direction".
The UK does not yet have "any clear explanation of what a Leave vote means in practice" Ms Sturgeon insisted.
"If we can read anything from the early signs, whether from government appointments or initial pronouncements, it is, though I hope I am wrong about this, that the UK is heading towards a hard rather than a soft Brexit."
Ms Sturgeon said that meant a "future outside the single market, with only limited access and significant restrictions on free movement".
Ms Sturgeon said she bore a "share of the responsibility" for the failure of the Remain campaign to convince a majority of UK voters.
She added: "Much of the blame for what happened on June 23 lies with the UK Government's ideological obsession with austerity, with its decision to make ordinary people pay the price of a financial crash they didn't cause and with its cynical collusion in the myth that cuts and public service pressures are the fault of migrants, rather than a direct result of deliberate economic policy."
She also condemned the "lack of leadership" from the UK Government and senior Brexit campaigners in the immediate aftermath of the vote
In the wake of the referendum, she said it was "the job of politicians not to pretend somehow that we instantly had all the answers but to give a sense of direction, to try to create some order out of the chaos".
Ms Sturgeon added: "That's what I was determined to do for Scotland and I assumed that UK politicians would do likewise. It turned out I was wrong about that."
She continued: " In fact, the absence of any leadership and the lack of any advance planning both from the politicians who proposed the referendum and from those who campaigned a leave vote surely must count as one of the most shameful abdications of responsibility in modern political history."
In her speech, Ms Sturgeon set out the five key interests she will try to protect during negotiations with the UK Government prior to the triggering of Article 50 - the formal mechanism to leave the EU.
These are "the need to make sure Scotland's voice is heard and our wishes respected", free movement of labour and access to the single market, protection of workers' and wider human rights, the ability to work with other nations to tackle issues such as terrorism and climate change, and having a say in the rules of the single market.
She challenged the UK Government to "find ways to demonstrate that Scotland's voice can be heard, our wishes accommodated and out interests protected within the UK".
But, with the UK having voted to leave the EU, the First Minister said: "I genuinely fear that a UK Government outside of the single market will seek economic competitiveness through deregulation and a race to the bottom.
"That would be devastating for the workers' rights and protections that we have all come to take for granted."
She added: " In terms of prospects for working around tax avoidance and transparency, I don't think the Brexit vote helps that in any way.
"What we want to see is countries working together to take away as far as possible the loopholes that often open up in different tax arrangements between different countries..
"One of the things that does really worry me is a UK outside of the single market, with all of the competitive disadvantages that is going to deliver to UK business, will seek to compensate for that with deregulation and a race to the bottom agenda.
"That equally would open up rather than close down opportunities for tax avoidance and tax evasion."
Scottish Labour Europe spokesman Lewis Macdonald said: " People in Scotland voted to remain in both the UK and the EU, and everything should be done to deliver on that mandate. Labour is the only party that supports delivering what the people of Scotland voted for.
"We have given the First Minister our backing to find a deal that meets the needs of the people of Scotland and we welcomed the Prime Minister's commitment to find common agreement amongst the four nations of the UK.
"It is essential that the leaders of all the devolved administrations and the UK Government work together in advance of any negotiations with the EU.
"All sides must put posturing to one side for the sake of the country and act in good faith.
"Any of our leaders deliberately placing obstacles in the way of an agreement that maintains our vital relationships with the rest of Britain and the rest of Europe would run counter to the express wishes of the people of Scotland.
"We want to strengthen workers' rights and human rights, and to support trade and jobs, both across the UK and Europe."
After Ms Sturgeon set out five key interests that must be safeguarded, Tory MSP Murdo Fraser said: "She is setting these up to fail to provide another flimsy excuse for a referendum re-run."
He added: " Nicola Sturgeon talks about five tests - but the truth is there's only ever one test for the SNP, and that's separation.
" Scotland does not want to go through the division and upheaval of another independence vote.
"Instead, the Scottish Government should be working hard to make the best of this, not shoehorning its narrow agenda into almost anything it can.
"It's pretty clear the SNP is going to amble through this process and reach the conclusion it always wanted."
Liberal Democrat MSP Mike Rumbles said: "S etting up straw men to pave the way for a possible second independence referendum will not help deliver the sort of deal that Scotland and the UK needs.
"The fact that talks with the UK Government and our EU partners are ongoing is welcome. But the First Minister needs to ensure that these are not set up to fail.
" I do not expect the First Minister to stop supporting independence. But I do expect her to honour her commitment to work with others in good faith.
"She will have my support if she does so. But focusing on independence would risk breaking the consensus that emerged following the Brexit vote."