Brexit Will Make Us Poorer, Government Forecasts Warn
It’s official: Brexit will make us poorer than we would be staying in the European Union.
That is the conclusion of a cross-departmental government 15-year forecast.
How much poorer depends on which Brexit route the UK takes, but the most likely outcomes would mean a hit to the economy of £60 billion and £100 billion with a no-deal scenario costing nearly £200 billion.
The 82-page report looks at four main scenarios.
They are: the government’s preferred outcome with frictionless trade; a standard free trade agreement, which means some friction at the border; a Norway-type arrangement, which would mean freedom of movement and ongoing rule taking; and finally, no deal.
On the first three it also looks at two immigration scenarios: the status quo – which is clearly not government policy – and zero net inflow from the EU.
The government’s white paper, with a change in immigration rules, leads to a hit of between 2.5% and 3.9% of GDP.
Crucially, the government has chosen not to model the impact of triggering the backstop arrangements to keep the Irish border open, which would see the UK stay in the customs union indefinitely.
There are also some heroic assumptions on the striking of new trade deals with the US, China and others. But together they would add only 0.2% to the economy, according to this analysis.
Theresa May is trying sell a vision of the UK, which sees it up to £100 billion poorer. A pretty hard sell – unless you think the alternative is more than twice as bad.
MPs are due to vote on Mrs May’s Brexit deal, which she insists is the only option, on 11 December.
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