Britain’s economy, including its food and drink sector, will be worse off after Brexit whether it leaves the EU with a free trade deal, single market access, or with no deal at all, according to leaked government analysis.
The “EU Exit Analysis – Cross Whitehall Briefing”, was leaked to BuzzFeed News and must be seen as highly damaging to the Government’s attempts to talk up the UK economy’s prospects after it leaves the European Union next year.
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Almost every sector of the economy included in the analysis would be negatively impacted in all three scenarios, with food and drink among the sectors hardest hit and key manufacturing areas of the country, such as the West Midlands, suffering most.
Under a comprehensive free trade agreement with the EU, UK growth would be 5% lower over the next 15 years compared to current forecasts, according to the analysis.
The “no deal” scenario, which would see the UK revert to World Trade Organization (WTO) rules, would reduce growth by 8% over that period. The softest Brexit option of continued single-market access through membership of the European Economic Area would, in the longer term, still lower growth by 2%.
These calculations do not take into account any short-term hits to the economy from Brexit, such as the cost of adjusting the economy to new customs arrangements.
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By GlobalDataIn response to the leak, Iain Duncan Smith, the former Conservative leader and supporter of Brexit, told the BBC’s Today programme the analysis should be taken “with a pinch of salt” and that the timing of its leak was “highly suspicious”.
“I would observe that almost every single forecast coming from government, and most of the international organisations, have been completely wrong,” he said.
