New data has highlighted the devastating blow Brexit has had to people’s income, with the average worker £1,300 worse off than if the UK had not quit the European Union.
The Government’s economic watchdog, the Office for Budget Responsibility, has said that the post-Brexit trading deal reached with the EU will reduce Britain’s long-run productivity by some four per cent compared with if it had remained.
It added that both exports and imports will be around 15 per cent lower in the long run than if Britain had stayed in the EU.
John Springford, deputy director at the Centre for European Reform, told the Standard: “Britain’s productivity determines how much money people are paid. So a full-time worker with average earnings will be about £1,300 worse off a year as a result of Brexit.
“The OBR’s estimate of the Brexit hit is the average of a range of forecasts undertaken by reputable economists, and isn’t definitive. The impact in the long run could be less, or more, than the OBR thinks. But if it’s right, the impact of Brexit on people’s earnings will be substantial.”
Paul Johnson, director of the Institute for Fiscal Studies, said: “Most analysis, including that of the OBR, suggests that our productivity and economic output will fall by around 4 per cent as a result of leaving the single market.
“What does that mean? Well in the long run we will all be about that much worse off on average, so people on average sorts of earnings might be £1,000 to £1,500 worse off (before tax) than they otherwise would have been. Of course it also means less money for public services like health and education.”
Rishi Sunak has so far refused to acknowledge the economic blow to Britain from Brexit, although chancellor Jeremy Hunt has accepted there are some harms from quitting the EU.
A Treasury spokesperson said: “Since leaving the single market, the UK has grown faster than France and Germany.
“The Government is making the most of our Brexit freedoms to grow the economy, including ambitious financial services sector reforms which will unlock over £100 billion of investment, and we are reviewing EU-derived rules in other critical growth sectors this year.”