The Brexit assessments the Government didn’t want released have been published – now everyone can see what they were hiding


The House of Commons Exiting the European Union Committee has published the Whitehall Brexit impact analyses that the Government did not want you to see.

Brexit Minister David Davis fought tooth and nail to keep the assessments of the possible impacts of Brexit on the economy confidential, insisting they might jeopardise negotiations with the EU if revealed.

Yet it in the end there is only one section of the impact reports which has been left out of the 29 pages that the Brexit Select Committee chose to make public, making a mockery of the Brexit Secretary’s argument.

The study involves economic forecasts of how regions will fare over the next 15 years. And as you can see below whichever type of Brexit, there is no part of the UK that won’t be left economically worse. And the more divergence from European regulations and trade the UK goes for, the worse the economic fall out, as many “experts” did warn.

There is nothing in this report that the Brexit campaign would have chosen to stick on the side of a bus.

No sign of the £350 million a week promised to be freed up for the NHS or other public spending. Instead Brexit means far graver cuts and austerity lasting a great many years.

  • If the UK leaves the EU on World Trade Organisation terms, the country is likely to plunge £120 billion into debt.
  • If despite the contradictions that Donald Tusk detailed yesterday, the Government manages to negotiate a free trade agreement, the country will still owe an eye-watering £80 billion.
  • A Norway – type agreement which involves staying within the single market leaves Britain £40 billion poorer.

There is a lot to take in, summarised below –

  • While the Government commissioned report warns there is no single model which can provide a definitive assessment of every single potential outcome, this assessment provides the Government with the “best available evidence base on which to draw a “broad” directional picture”:

  • The assessments weigh up the reduction of our trade with the EU with the potential for new non-EU trade deals and regulations to increase competitiveness, as well as changes to migration.

  • The research calculated the impact of three different models of Brexit – EEA – a Norway-type arrangement involving staying in the Single Market, a Free Trade Agreement (FTA) and the no-deal option which is trading on World Trade Organisation (WTO) terms.
  • In all these Brexit scenarios Non-Tariff Barriers to trade with the EU is “the most material factor” to the British economy, affecting every sector you would imagine – from food and drink to defence. Non-Tariff Barriers are rules or specific market requirements that make importation or exportation of products into a market difficult and/or costly.

  • The UK faces tariff barriers with the rest of Europe unless there is some sort of customs agreement.
  • Tariff barriers hit more sectors of the economy and more devastatingly depending how hard a Brexit model you choose. Agriculture, food and drink take a massive hit with the sort of Free Trade Agreement (FTA) that Theresa May has now called for. Though remember, the EU have said for an FTA to operate all parties need to trade under the EU’s rule book not just the mutual recognition of standards that Theresa May outlined last Friday.
  • In a WTO (no deal) scenario, UK industry and manufacturing take a serious hit too.

  • And despite what Hard Brexiteers like Jacob Rees-Mogg might say about the potentials of non-EU trade deals, the long term increase to GDP of 0.2% – 0.7% far from makes up for the losses in trade with our biggest and easiest trading partner the EU. – Which may explain why Rees-Mogg has been attacking the civil service publicly ever since there was a clamour for these assessments to be published.

  • The assessments conclude whichever type of Brexit Britain plumps for, the economy will take a longterm hit over the next 15 years.
  • If the UK stays in an EEA-type arrangement with the EU like Norway, the loss in GDP will be almost as much as the 2% drop after the 2008 global crash.
  • The FTA scenario favoured by Theresa May results in a loss of GDP per person of 2.4% – 5.9%.
  • Leaving on WTO (no deal) terms sees a much greater loss per person over the next 15 years of 3.6% to 8.9%.

  • This graph of potential economic drivers shows starkly how the gains from leaving the EU (above the line) barely make up for the losses to the British economy (below the line) whichever scenario we are looking at:

  • In all three scenarios modelled – pretty much every sector of the UK economy takes a hit.
  • Industries affected the most are chemicals, food and drink, clothes, manufacturing, cars and retail.
  • Only in one of the three scenarios, farming benefits slightly. But the combined growth of all sectors together is severely hampered, though much less so in a EEA type deal where Britain stays in the Single Market.

  • The pages on each sector make bleak reading – see the link below. Even the financial sector, which accounts to 7.2% of the Gross Value Added to the UK economy takes a hit, though less so in an EEA-type scenario.
  • Worryingly for the Conservatives, in an FTA-type scenario towards which they are steering the UK, “market access would be hampered almost to the same extent as in a WTO scenario.” – Something the EU has consistently been warning about. The report warns that in this scenario, “London’s Status as a financial centre could be severely eroded.”

  • As we reported after the assessments were leaked last month regionally, no part of the UK will be left unscathed.
  • The hardest hit North East economy will be 11% worse off than if staying in the EU under the current stated aims of Theresa May, 16% worse off under WTO terms.
  • All regions take much less of a hit in a EEA-type arrangement.
  • Despite the grim predictions for the financial sector, London fares the least worse, the North East, West Midlands, Northern Ireland and the North West suffering the most.

  • Other EU countries will also suffer from a loss in trade with the UK, Ireland particularly. Though no country’s trade comes close to being as badly affected as Britain’s, as we rely on the EU for nearly 50% of our trade in goods and services.

The impact on voters reading this and knowing that Theresa May is embarking on a course that will make every sector of the British economy and every single region poorer remains to be seen.

Labour MP Chris Leslie, part of the Open Britain group campaigning for a softer Brexit – said: “This whopping hit to the public finances, on top of an exit bill of at least £40bn, means less money for the NHS, for schools, for the defence budget and all our other national priorities.

“The Government can no longer conceal the grim fact that they are leading us to a new era of austerity. As new facts like these emerge about the monumental costs of Brexit, everyone is right to keep an open mind about whether it is all worth it.”

And the different sectors affected had dire warnings too. The Food And Drink Federation’s Tim Rycroft warned:

“It is deeply alarming to see the financial impact of any bad Brexit deal on UK food and drink set out in such stark terms. The findings show that food and drink would be worse off in every single scenario modelled – faring the worst under WTO terms.”

“We’ve been calling for the Government to come clean about Brexit for more than a year. Now we see some of what they were trying to hide,” said Eamon O’Hearn of  GMB, Britain’s general union, adding, “these industries are particularly sensitive to trade and import barriers, which highlights the potential damage from Government’s red line on not being in “a” or “the” customs union.

“GMB has been calling for this analysis to be made public so that UK workers and the public can see for themselves what the future could hold for their jobs, families and communities.

“This is not a political game – this affects people’s lives, their jobs, their families and their futures.”

Read the full 29 pages of the EU Exiting Analysis Cross Whitehall Briefing.


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1 Response

  1. Andrew Carter

    You may have mentioned the wrong Rees-Mogg about halfway through. And a WTA in place of a WTO, if I am not mistaken. Thanks for the article.

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