UK analysis shows big economic hit from Brexit
The British government’s own analysis of the economic impact of Brexit forecasts a fall in gross domestic product growth of up to 16 percent relative to current forecasts in the worst affected region of the U.K.
An internal government report that was leaked to BuzzFeed last week was made available to MPs on Wednesday — and quickly leaked to the press. According to Sky News, the report contains a region-by-region breakdown of potential GDP losses under three scenarios: staying in the single market, leaving with a free-trade deal, and a no-deal Brexit.
The region on course to take the biggest hit is the North East, which voted heavily in favor of leaving the European Union. Government figures show a 3 percent fall in GDP growth by staying in the single market, an 11 percent drop under the trade-deal model, and a 16 percent fall if there is no Brexit deal. The losses are predicted to come over 15 years and are relative to projected growth if the U.K. had remained within the EU.
London comes out the best with a drop of 1 percent in GDP growth staying in the single market, a drop of 2 percent under the trade-deal scenario, and a drop of 3.5 percent with no deal.
Leave-voting Wales would suffer a 9.5 percent drop in GDP growth under a no-deal scenario, with Remain-backing Scotland facing a fall of 9 percent and Northern Ireland down by 12 percent.
A government spokesperson said: “This document does not represent Government policy and does not consider the outcome we are seeking in the negotiations.
“As Ministers clearly set out in the House, this is provisional internal analysis, part of a broad ongoing program of analysis, and further work is in progress. We are seeking an unprecedented, comprehensive and ambitious economic partnership — one that works for all parts of the U.K. We are not expecting a no-deal scenario.”
Northern Ireland Secretary Karen Bradley told the House of Commons Wednesday: “It is important to state that the U.K. government wants to achieve a good deal for the U.K. that protects the economic integrity of the U.K.”
Trade Secretary Liam Fox said the leaked assessment underestimates the potential increase in trade with the rest of the world after Brexit.
“In any assessment you can only get out of it the assumptions that you put in … If we can improve trade performance and improve our market access with new agreements — that is a double plus for Britain,” he told reporters when asked about the leaked analysis while on a trip to China last week, according to Sky News.
However, Stephen Doughty, a Labour MP, and supporter of the campaign group Open Britain said: “It is utterly shameful that people all across this country are having to rely on leaks to find out how much damage a hard, destructive Brexit will do to their local economies and the country as a whole.”
Government forecasts of Brexit’s economic impact should have been drawn up with the aim of making the results public, the chair of the U.K.’s official budget forecaster said Tuesday. Robert Chote, chairman of the Office for Budget Responsibility, said the furor surrounding the leak of government forecasts of different Brexit outcomes, and the subsequent questioning of civil servants’ independence, had “not been a happy period.”