UK will be worse off in every possible scenario after Brexit, concludes leaked Government analysis

Every sector of Britain's economy will be negatively impacted by departure from EU, say Whitehall officials 

Chris Baynes
Tuesday 30 January 2018 00:54 GMT
UK will be worse off in every possible scenario after Brexit, concludes leaked Government analysis

The UK will be worse off after Brexit regardless of the terms of its departure from the EU, according to a leaked Government impact assessment.

Economic analysis prepared by Whitehall officials for the Department for Exiting the EU (DexEU) concluded growth would decline in each of three possible scenarios it modelled.

Almost every sector of the economy and every region of the UK would negatively impacted, according to a leaked copy of the document seen by BuzzFeed News.

Even if the UK is able to negotiate a comprehensive free trade agreement, as Prime Minister Theresa May hopes, growth would be down five per cent over the next 15 years, the analysis said.

The loss would rise to eight per cent if Britain left without a deal and was forced to fall back on World Trade Organisation (WTO) rules.

Alternatively, if the UK were to retain access to the single market through membership of the European Economic Area, growth would decline just two per cent.

The document was reportedly being presented to key Cabinet ministers in one-to-one meetings ahead of a Brexit sub-committee next week and was not intended to be made public.

The leaked findings are likely to infuriate pro-Brexit Tory MPs who already suspect the Government is heading for a “soft” break which will retain many of the existing elements of the relationship with Brussels.

A Government spokesman told Buzzfeed: “We have already set out that the Government is undertaking a wide range of ongoing analysis in support of our EU exit negotiations and preparations.

“We have been clear that we are not prepared to provide a running commentary on any aspect of this ongoing internal work and that ministers have a duty not to publish anything that could risk exposing our negotiation position.”

A Government source added: “As part of its preparations for leaving the European Union, officials from across Whitehall are undertaking a wide range of ongoing analysis.

“An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist as well as other external estimates.

“It does not, however, set out or measure the details of our desired outcome – a new deep and special partnership with the EU – or predict the conclusions of the negotiations.

“It also contains a significant number of caveats and is hugely dependant on a wide range of assumptions which demonstrate that significantly more work needs to be carried out to make use of this analysis and draw out conclusions.”

According to the leaked document – entitled “EU Exit Analysis – Cross Whitehall Briefing and dated January 2018” – almost every sector of the economy would be adversely affected under all three scenarios, with chemicals, clothing, aviation, cars and retail hardest hit.

It also found that every region of the UK would lose out, with the North East, the West Midlands and Northern Ireland facing the biggest loss of growth.

It warned that London’s position as a major financial centre could also be severely eroded, with the position under a free trade agreement not very different to operating under WTO rules.

Asked by the analysis was not being published, a DExEU source reportedly told Buzzfeed News: “Because it’s embarrassing.”

However, the analysis calculated a free trade deal with the United States could add 0.2 per cent to growth while agreements with other countries such as China, India, Australia and the Gulf states, could together add another further 0.1 per cent to 0.4 per cent.

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