Theresa May’s Brexit deal will leave the UK £100 billion worse off a year by 2030 than if it had remained in the EU, a study by the National Institute of Economic and Social Research (NIESR) has found.
The study revealed GDP would be 3.9 per cent lower over the next decade, which is the equivalent of losing the economic output of Wales or the City of London, the report authors noted.
This would leave people on average £1,000 worse off each year.
May’s deal was approved by the EU on Sunday and includes a £39 billion “divorce bill” which could increase if talks continue past the March deadline day.
The Leave campaign made several promises that Britain would be better off outside the EU during its referendum campaign, including several pledges on re-distributing the £350 million a week we supposedly send to the EU.
Lib Dem leader Sir Vince Cable, who supports a second referendum, said the current deal is “a million miles from what the Brexiters promised two years ago and will create decades of uncertainty for business and investors.”
The study found that the government’s preferred outcome – leaving in March 2019 and entering a transition period lasting until December 2020 before moving to a free trade agreement – would lead to a huge reduction in trade and investment.
This is largely because leaving the single market would create “higher impediments” to services trade, making it less attractive to sell services from the UK, it said.
“This discourages investment in the UK and ultimately means that UK workers are less productive than they would have been if the UK had stayed in the EU.”
By 2030, at the end of the first decade outside the EU, the research predicts that GDP per head would fall by 3 per cent, amounting to an average cost per person of £1,090 at today’s prices.
It also estimates that total trade between the UK and the EU would fall by 46 per cent.