Leak nudges UK Prime Min­is­ter Theresa May to­wards a softer Brexit

Irish Independent - Business Week - - INTERVIEW - Neil Un­mack

THE Bri­tish govern­ment’s lat­est leak will nudge the coun­try to­wards a softer Brexit. State pa­pers re­port­edly show the coun­try will lose in every sce­nario after it leaves the EU. The up­shot looks like a less abrupt schism rather than a whole­sale U-turn.

The pa­per, re­ported by ‘Buz­zfeed’, will sharpen the de­bate over how the UK leaves the Euro­pean Union. It chron­i­cles three sce­nar­ios: a soft Brexit whereby the UK stays in the sin­gle mar­ket and pre­serves ex­ist­ing sup­ply chains and mar­ket ac­cess; a hard one fea­tur­ing only a trade deal on goods; and no deal at all.

The three sce­nar­ios would mean lower growth of 2pc, 5pc and 8pc re­spec­tively over 15 years rel­a­tive to cur­rent fore­casts.

Those sce­nar­ios ex­clude the “deep and spe­cial” re­la­tion­ship that the UK hopes to strike, which as­sumes a deal on both goods and ser­vices. Yet the im­pli­ca­tion re­mains grim: even if she can get such a deal, UK growth would still suf­fer a hit of any­where be­tween 2 and 5pc.

The pa­pers will fuel ten­sions within the Con­ser­va­tive Party and govern­ment. The party is split be­tween ar­dent Brex­i­teers who ad­vo­cate merely a trade deal with Europe, and those ar­gu­ing for closer reg­u­la­tory align­ment, or even mem­ber­ship of the sin­gle mar­ket.

Brex­i­teers will see it as an at­tempt to stop with­drawal by a Europhile civil ser­vice.

That still looks un­likely. Pub­lic opin­ion is not eas­ily swayed by tech­ni­cal re­ports. And the con­clu­sions of the govern­ment pa­per are not rad­i­cally dif­fer­ent to other neg­a­tive re­ports done by third par­ties.

Yet it may help shape the kind of Brexit that hap­pens.

Theresa May will in­creas­ingly strug­gle to make an op­ti­mistic case for leav­ing the sin­gle mar­ket and cus­toms union if her own anal­y­sis rub­bishes it. It may mean­while make it eas­ier for the Labour Party to ad­vo­cate stay­ing closer to Europe.

The re­port also makes

May, who ad­vo­cates leav­ing the sin­gle mar­ket and cus­toms union, vul­ner­a­ble. Her pop­u­lar­ity has fallen and if she falls, her vi­sion of Brexit may also die. (Reuters Break­ing Views)

Prime Min­is­ter Theresa May has strug­gled to make an op­ti­mistic case for leav­ing the sin­gle mar­ket and cus­toms union

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