MAY’S DEAL WILL COST US £100BILLION
That’s the Treasury’s own estimate... but it still beats £200bn price of ‘no deal’
THE Brexit deal proposed by Theresa May will leave the country £100billion worse off, the Treasury predicts.
But a no-deal exit from the European Union could shrink the economy by £200billion.
Labour’s David Lammy said: “The Government are showing their decisions will make everyone poorer.”
THERESA May claims she has negotiated the best Brexit deal for Britain but her own Government has forecast it could have dire financial consequences.
The Treasury’s predictions under the scenario closest to the Prime Minister’s agreement suggest the economy would lose out on roughly £100billion by 2035.
It includes the £39billion divorce settlement and takes into account future savings from no longer paying into the EU.
Labour MP David Lammy, of the anti-Brexit group Best for Britain, said: “These figures show the Government’s stated policy is to make our economy smaller and weaker.
“The Government are showing starkly that their decisions will make everyone poorer.”
The analysis suggests a no-deal Brexit would result in a £200billion hit on the economy.
Chancellor Philip Hammond said all possible Brexit outcomes would leave the UK worse off in economic terms.
But he insisted Mrs May’s deal would keep the costs to a minimum, saying it “delivers an outcome that is very close to the economic benefits of remaining in”.
Former Brexit Secretary Dominic Raab said: “Politically, it looks like a rehash of Project Fear.
“People expect to be inspired, not scared witless into deferring to the Government.”
The Bank of England also issued a severe warning yesterday, saying that a no-deal exit could trigger a worse recession than during the 2008 financial crisis.
The Treasury’s analysis predicts that the Prime Minister’s deal could result in GDP being 3.9% lower by 2035 compared to what would have happened had the UK voted Remain at the referendum.
This would be equivalent to £100billion to the economy.
While the economy would continue to grow, it would be at a slower rate than staying in the EU, the Treasury said.
Real wages would be 2.2% lower and every sector of the economy would suffer a plunge in trade, while the Budget deficit would soar by £26.6billion.
In the Commons, Mrs
May dodged admit- ting the economy would be worse off compared with staying in the EU.
She said: “What we have seen behind the analysis this morning is that our deal is the best deal available for jobs and our economy.” But Leave Means Leave chairman John Longworth was furious, saying: “We predicted this relaunch of ‘Project Fear’ with the Treasury putting out faux economic predictions, just ahead of the PM trying to get the worst deal in history through Parliament.
“The Government strategy is so transparent it would be laughable were the subject not so serious.” He added: “Why should anybody believe a single word of it?”
The Treasury analysis warned that if there
were no deal and a sharp fall in EU workers then, in the worst case, the economy could shrink by as much as 10.7% over 15 years.
Analysis suggests this would be equivalent to £200billion, with the North of England and Northern Ireland bearing the brunt.
It is predicted just 0.2% of GDP will be clawed back by even the most ambitious of global trade deals after leaving the EU. The Bank of England said a no-deal Brexit could cause a recession and trigger a surge in living costs – partly as a result of the pound slumping by 25%.
Governor Mark Carney said the UK is “not yet fully prepared for a cliff-edge Brexit”.
The Confederation of British Industry chief economist Rain Newton-Smith said yesterday: “It surely puts to bed some of the more farfetched ideas a hard-landing Brexit will not seriously hurt the economy.”
Last night the Government officially published the “meaningful vote” motion, on which MPs will vote on December 11.
Jeremy Corbyn said Labour will oppose “Theresa May’s botched Brexit deal”.
Meanwhile, research shows household confidence has fallen to the lowest level in a year.