Government’s preferred Brexit scenario will leave UK public finances £615m worse off a week
The UK’s public purse will be £615 million lighter a week under the government’s preferred Brexit scenario, King’s College research has revealed.
A far cry from the promised £350 million windfall that the Leave campaign promised, new analysis has revealed that even if the government gets its preferred option of a “bespoke deal” that would mean about £40 billion more in annual public borrowing than under the status quo by 2033/34.
That equates to £615m per week, or 22 per cent of the NHS budget, after translating that into today’s prices, the research claims.
Jonathan Portes, a professor of economics at King’s College, based this scenario on the Prime Minister’s recent Mansion House speech which outlined the Brexit she hopes to deliver.
This would mean leaving the single market and customs union whilst maintaining access to EU markets with minimal tariff and non-tariff barriers. It would also include the flexibility to diverge from Brussels regulations, negotiate trading relationships with other non-EU countries and implement restrictions on immigration.
The research estimates that this outcome would leave the country better off than a no-deal Brexit but worse off than under the “Norway model” or under an average free-trade agreement such as the one Canada has with the EU.
The Norway model, in which the UK would stay in the single market and adhere to EU rules and regulations but leave the customs union, would have a negative fiscal impact of £262 million per week while the Canada option would cost around £877 million per week, Mr Portes finds.