30.01.2018

Leaked documents show the worst Brexit scenarios

400A confidential report prepared for the British government and leaked on Monday suggests all UK industries will be hurt by leaving the European Union, Buzzfeed News reported.

The paper, EU Exit Analysis — Cross Whitehall Briefing, is dated January 2018, and looks at three of the most plausible Brexit scenarios based on existing EU arrangements.

The findings are the latest embarrassment for British Prime Minister Theresa May's government, which has faced renewed criticism from other EU leaders about the lack of a coherent Brexit strategy.

The leak comes as Prime Minister Theresa May prepares to fly out on a three-day trade mission to China and as parliament’s upper House of Lords begins scrutinising the EU (Withdrawal) Bill, a key plank of Brexit legislation.


The softest Brexit option of continued Norway-style single market access through membership of the European Economic Area, an option ruled out by Theresa May, would in the longer term lower growth by 2 per cent.

The forecasts, produced by economists working across Whitehall departments, suggest that Britain would suffer a less dramatic hit than those produced by the Treasury ahead of the 2016 EU referendum.

Under those calculations, dubbed “Project Fear” by the Leave campaign, the WTO option was forecast to cost 7.5 per cent of growth over 15 years, an FTA 6.2 per cent and a Norway-style single market deal 3.8 per cent.
And if London and Brussels end up with a “no deal” scenario and revert to World Trade Organisation rules, growth would be reduced by 8% over the same period, the report said, according to BuzzFeed News.

Responding to the leak, a government source said officials across the ministries were undertaking “a wide range of ongoing analysis”.

“An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist,” the source said.

“It does not, however, set out or measure the details of our desired outcome – a new deep and special partnership with the EU.

It also contains a significant number of caveats… significantly more work needs to be carried out to make use of this analysis.
Opposition Labour lawmaker Chris Leslie, part of the Open Britain group – the continuity Remain campaign from Britain’s 2016 referendum on EU membership – urged the government to make its assessment public.

“The government must now publish their analysis in full, so that MPs and the public can see for themselves the impact that Brexit will have and judge for themselves whether it is the right thing for our country,” he said.

Jacob Rees-Mogg, the chairman of the pro-Brexit European Research Group of MPs from May’s governing Conservative Party, said the findings were “highly speculative”.

Stephen Gethins, the SNP’s Brexit spokesman, said: “This is highly embarrassing for Theresa May, but for those of us working to ensure the UK stays in the single market and customs union, this is not surprising.”

Meanwhile parliament’s foreign affairs scrutiny committee said Britain’s diplomatic network was spread too thinly and needed to be bolstered to cope with Brexit.

The panel of MPs said British representation in EU capitals, particularly Berlin and Paris, needed to be significantly increased to help maintain influence in Europe.






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