Brexit: UK to be worse off in every scenario

By Muhammad Mussa

LONDON

The U.K. would be worse off in every scenario should it proceed with Brexit, according to a leaked government analysis of the economic impact of leaving the EU.

The analysis, titled “EU Exit Analysis - Cross Whitehall Briefing” and dated January 2018, looked at three possible scenarios: a no-deal scenario, in which the U.K. would revert to World Trade Organization (WTO) rules, a comprehensive free-trade deal with the EU and a continued single-market access through a European Economic Area membership.

The document, which was meant to be shown confidentially to cabinet ministers this week, was leaked in what was described as an “embarrassing” development to Prime Minister Theresa May and Brexit Secretary David Davis.

Under a no-deal scenario, the U.K. would see economic growth reduced by 8 percent.

Under a comprehensive free trade agreement with the EU, growth would be reduced by 5 percent over the next 15 years. However, if the U.K. retained access to the single market and be a European Economic Area member, economic growth would be reduced by only 2 percent.

Nonetheless, the impact assessment does not take into account the short-term effects that Brexit will have on the economy, such as adjusting the economy to new customs arrangements and rules, which could prove worse than the aforementioned statistics.

When looking at the sectors most affected, the document stated that manufacturing, retail, cars, food and drink, and chemicals would all face negative effects in all three scenarios.

All regions of the U.K. would also be affected negatively, with the northeast, the West Midlands and Northern Ireland facing the biggest declines in economic performance.

Pro-EU activists and Remain campaigners said that the report, seen by BuzzFeed News, had confirmed their initial fears of Brexit and its impact on the U.K.

Eloise Todd, chief executive of the anti-Brexit organization Best for Britain, said: “According to the government’s secret analysis, even the softest Brexit scenario will mean a 2 percent hit to growth.

“The government are calling this document embarrassing but it’s more than that. It is a colossal act of economic self harm, written down clearly, in black and white. We are reading about an economy facing the abyss.”

Chris Leslie, a Labour MP and supporter of the Open Britain group campaigning against a hard Brexit, has called for the public release of the document, adding: “It’s little wonder the government has repeatedly refused to publish any serious Brexit analysis, their own impact assessments underline what has long been obvious, that their reckless plan to crash out of the single market and the customs union will leave us all much worse off.

“There is no mandate for this hard and destructive Brexit. No one voted to make themselves or their families worse off."

Though the government refused to comment on the leaked documents, it argued that the analysis did not cover May’s preferred option of a bespoke deal that would amount to a “deep and special partnership” with the EU.

Negotiations over trade talks between Britain and the EU are expected to resume in March.