Britain worse off under every Brexit option, study finds
THE country is on course to be worse off under every Brexit scenario studied by UK Government experts.
A paper published today compares the impact of the different types of relationships put forward with the European Union after the UK leaves.
They range from a prediction that under Theresa May’s withdrawal deal, the UK’s GDP would be 3.9% smaller after 15 years than it would be if Britain stayed in the EU. In the case of a no-deal exit the economy would take a 9.3% hit.
The Government insists this is not a prediction of how the economy will perform outside the EU because other factors could have a major impact.
Instead, the 83-page document examines the relative benefits of four different options:
■ The proposals agreed by cabinet at Chequers in July;
■ Norway-style membership European Economic Area;
■ a Canada-style free-trade agreement; and
■ No deal.
It says that the free-trade deal and Norway-style arrangement didn’t meet the Government’s objectives as a Norwaystyle deal would mean staying in the Single Market and therefore accepting freedom of movement, while a Canada-style free trade deal would not prevent a hard border in Northern Ireland.
The study also looks at how changes in trade policy could affect the UK’s nations and regions.
It estimates that Wales would see close to no change in its Gross Value Added (GVA) if the Chequers plan becomes a reality once the UK Government has negotiated a new economic relationship with the EU.
However, Wales could see a fall of just over 1% if the country stays in the European Economic Area; a reduction of nearly 5% if it has to rely on a free trade agreement; and a crash of more than 8% if there is no deal.
At present, Theresa May is working to secure support for a vote on December 11 on the Withdrawal Agreement, which of the
Theresa May is facing the fight of her career to get her Brexit deal through the Commons on December 11
would see the UK enter a transition phase – during which much of the status quo would continue – until the end of 2020. During that time, the UK and EU will attempt to negotiate a new partnership.
The Government analysis suggests that the UK’s GDP would go down by 2.5% if Mrs May’s Chequers vision became a reality. It also models a less optimistic version of Chequers, suggesting GDP could fall by 3.9%.
Other experts have suggested that a fall of 3.9% could equate to around £100bin.
The document suggests additional borrowing associated with Brexit could reach £119.1bn in the 2030s, compared with £26.6bn under Mrs May’s preferred option.
The paper also indicates that the country would be better off if there was no change to migration arrangements. It suggests that if this was the case GDP would fall by 0.6% instead of 2.5% if the PM’s plan was negotiated.
Civil servants did not model what would happen if the country stayed in the “backstop” arrangements designed to prevent a hard border in Ireland.
Shadow Chancellor John McDonnell said the analysis was already out of date.
Rain Newton-Smith, the CBI’s Chief Economist, described it as “bleak”
She said: “This is about real people’s lives and jobs in the years ahead and it’s clear to business that while the Government’s deal is not perfect, it certainly fits the bill in reducing short-term uncertainty and opens up a route to a decent trade deal in the future.”
Former Brexit Secretary David Davis has said economic warnings from the Government are part of a “propaganda onslaught”.
He said: “Treasury forecasts in the past have almost never been right and have more often been dramatically wrong.”
Plaid Cymru Brexit spokesman and Arfon MP Hywel Williams said the analysis confirmed Brexit would make us poorer.
In the Commons, Mrs May defended her Brexit plans, saying: “Our deal is the best deal available for jobs and our economy, that allows us to honour the referendum and realise the opportunities of Brexit. This analysis does not show that we will be poorer in the future than we are today, no it doesn’t, it shows we will be better off with this deal.”