Britain’s Prime Minister Theresa May walks out of 10 Downing Street to greet the Prime Minister of Estonia, Juri Ratas in London, January 30, 2018. REUTERS/Toby Melville
January 30, 2018
LONDON (Reuters) – Britain’s economy will be worse off after Brexit whether it leaves the EU with a free trade deal, with single market access, or with no deal at all, according to a government analysis leaked to BuzzFeed News.
The “EU Exit Analysis – Cross Whitehall Briefing”, dated January 2018, is another blow for Prime Minister Theresa May, under fire for lacking leadership and a clear Brexit strategy as she negotiates Britain’s departure from the bloc.
A government source said the analysis was only part of the picture and did not give any forecasts for Westminster’s preferred option of a bespoke deal, while a spokeswoman said: “We have been clear that we are not prepared to provide a running commentary on any aspect of this ongoing internal work.”
Nevertheless, the analysis released at http://bzfd.it/2BBu2B6 spurred calls for the government not only to publish its full impact report but also to change tack and look again at staying in the European Union’s customs union and single market.
“The UK government’s own analysis makes clear that leaving the EU will, in all circumstances, harm the economy of every nation and region in the UK,” Scotland’s first minister, Nicola Sturgeon, said.
Chris Leslie, an EU campaigner for Open Britain and lawmaker from the opposition Labour Party, said: “There is no mandate for this hard and destructive Brexit. No one voted to make themselves or their families worse off.”
They were two of the many voices calling for the government, which is deeply divided over what sort of relationship Britain should have with the EU, to make its analysis public.
The reported analysis suggested that if Britain agreed a comprehensive free-trade agreement with the EU, growth over the next 15 years would be 5 percent lower than current forecasts.
Under a no-deal situation in which Britain returns to World Trade Organization rules, the United Kingdom’s growth will be reduced by 8 percent over the same period.
If May can negotiate continued access to the single market through membership in the European Economic Area, long-term growth will be 2 percent lower, the analysis showed.
Every sector of the economy would be negatively affected in all three scenarios, with chemicals, clothing, manufacturing, food and drink, and cars and retail the hardest hit.
But Brexit campaigners questioned the veracity of the forecasts, employing the same arguments during the referendum campaign in 2016 when they dubbed predictions of economic collapse if Britain left the bloc “project fear”.
“It’s simply wrong,” said Jacob Rees-Mogg, a Conservative lawmaker and supporter of a clean break with the EU.
(Reporting by Kanishka Singh in Bengaluru, Guy Faulconbridge, Elizabeth Piper and Elisabeth O’Leary in London; Editing by Hugh Lawson)
