Theresa May's Brexit deal could make UK economy 3.9% smaller, according to the Government
4 min read
Britain's economy could be hit by 3.9% as a result of Theresa May's Brexit deal, according to the Government's own analysis.
Figures produced by the Department for Exiting the European Union showed that under any Brexit scenario, the UK's GDP will be smaller in 15 years' time than it would have been had the country stayed in the EU.
Workers' salaries would also take a hit, while trade will also suffer, according to the 90-page document.
Leaving the EU without a deal would cause the most damage, reducing economic output by up to 9.3%, while a Canada-style free trade agreement - the favoured option of Tory Brexiteers - could shrink GDP by 8.1%.
Wages would fall by an estimated 2.7% after 15 years under the model closest to the proposed deal, and by 10% under a no-deal scenario, according to the Government's analysis.
Minutes after the findings were released, Mrs May told MPs they showed that her deal - which the Commons looks likely to reject next month - was the best option for the country.
She said: "It does show that this deal that we have negotiated is the best deal for our jobs and our economy which delivers on the results of the referendum for the British people. And I believe that we should be delivering on the result of the referendum."
Responding to a question from SNP Westminster leader Ian Blackford, Mrs May said: "The analysis does not show that we will be poorer than the status quo."
Mr Blackford replied: "I do wonder if the Prime Minister has read her own analysis."
The figures emerged just hours after Chancellor Philip Hammond admitted that any type of Brexit would leave Britain poorer than it would otherwise have been.
He said: "If you look at this purely from an economic point of view there will be a cost to leaving the European Union because there will be impediments to our trade."
Labour MP David Lammy, of the pro-EU Best for Britain campaign, said: "These figures show that the Government's stated policy is to make our economy smaller and weaker.
"The Government are showing starkly that their decisions will make everyone poorer.
"As the Prime Minister battles to save her deal these figures are more evidence about why we need another vote. I cannot believe Leave or Remain voters both voted to make themselves and their families worse off.
"As the Prime Minster faces a Parliament that is dead set against her deal, this data is added to the heap of reasons why it is a bad deal."
But Tory MP Mark Francois told Sky News the figures were further evidence of "Project Fear" designed to scare people about the consequences of Brexit.
He said: "It is a sad fact that the Treasury under Philip Hammond has now lost moral authority. Economic forecasters no longer really believe Treasury forecasts... because they're so blatantly politically wonky."
Fellow Conservative Brexiteer, Simon Clarke, said: "Voters comprehensively rejected establishment scare stories during the 2016 referendum debate – and it turns out that they were absolutely right to do so. Let’s not bore and patronise them further with Project Fear Take 3.
"The ingenuity, brilliance and creativity of the British people hasn’t let us down before. Even the Chancellor said at the weekend that the fundamentals of the UK economy are strong. Why can’t the Treasury follow his lead and start backing Britain?"
BLEAK
Rain Newton-Smith, chief economist with the CBI, said: "These forecasts paint a bleak picture over the long-term of a no deal Brexit or a Canada-style deal. It surely puts to bed some of the more far-fetched ideas that a hard landing Brexit will not seriously hurt the economy.
"This is about real people’s lives and jobs in the years ahead and it’s clear to business that while the Government’s deal is not perfect, it certainly fits the bill in reducing short-term uncertainty and opens up a route to a decent trade deal in the future.
"Politicians of all parties should speak to businesses in their constituency to hear about the impact a bad Brexit will have on them and their workforce. And the longer a ‘no deal’ scenario remains possible, the more corrosive the impact on jobs and investment plans."
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