UK significantly worse in all Brexit scenarios – official forecast | Policy

According to a benchmark economic badysis conducted by a range of ministries, including the Treasury, the UK would be worse off in all possible Brexit scenarios in 15 years.

The long-awaited document concludes that the Checkers plan would have been 0.6% lower than GDP in 2035-2036 – even though the latter was abandoned after a conservative right-wing uprising – and 7.7% lower if the UK would collapse without agreement, compared to the UK remaining in the European Union.

The officials modeled each scenario on a range, comparing them in nominal terms. In the worst case scenario, GDP would be 10.7% lower than if the UK had stayed in the EU in 15 years, baduming there was no more net migration in the United Kingdom from the EU and the European Economic Area. (EEE) after Brexit.

Prior to the publication of the badysis, Chancellor Philip Hammond said the UK would be in a worse situation after Brexit, stating: "If you look at this from a purely economic point of view there will be a cost to leave the European Union because there will be obstacles to our trade. "

Remarkably, none of the scenarios roughly modeled on the May agreement were accepted over the weekend. But badysts have developed a scenario based on auditors with 50% higher non-tariff barriers to facilitate comparison. According to them, the GDP would be lower by 2.1% in 2035-2036.

The deal negotiated in May will likely come somewhere between the two scenarios described by the auditors, which means that the UK would be between 0.6% and 2.1% lower in nominal GDP terms in 2035 -2036 that he remained in the EU.

The Chancellor of the Shadow, John McDonnell, to whom an urgent question had been asked in the House of Commons after the publication of the badysis, said that it was ridiculous that officials had produced a economic badysis of the plans based on the Checkers proposals, which the government had abandoned.

"The only thing this document shows, the agreement on the table is worse than the agreement on the abandoned Checkers," McDonnell told the MPs.

The Chancellor had previously told the BBC that the May agreement "would absolutely cost-down" as a result of a less stringent trade deal with the EU. "The economy will be slightly smaller in the Prime Minister's favorite version," he said.

The official badysis also concluded that:

• According to the Norwegian EEA scenario, favored by some conservative conservatives, the GDP would be 1.4% lower in 15 years, which is worse than the additional scenario developed after the signing of the May agreement during the first half of the year. weekend.

• Under a Canadian-style deal, backed by Boris Johnson and David Davis, the UK would be in a worse situation at 4.9% than staying in the EU, concludes the United States. ;study.

All scenarios were based on the badumption that the EU's migration rules remained virtually unchanged. If migration rules are tightened to the point where net EU and EEA net migration is zero, GDP would be 1.8% lower in 2035-2036.

According to the official badysis, net public sector borrowings would reach an additional € 141 billion in 15 years in the worst case scenario, according to which there was no net migration from the EU.

In the base scenario, the loan would be £ 119 billion higher in a non-transaction scenario, £ 96 billion more at a scenario similar to Canada's and £ 27 billion more in the Checkers scenario. Migration would remain at similar levels if the UK adopts a Norwegian model, but by allowing migration, borrowing would be £ 22 billion higher.

The Brexiters immediately accused the government of launching a propaganda attack that was "fear of the project". Davis, the former secretary of Brexit, said: "In the past, Treasury forecasts have almost never been accurate and, more often, they were dramatically wrong."

Predictions that the UK economy would shrink by 2.1% in the 18 months following a clearance vote were unfounded, Davis said. The economy has actually increased by 2.8%.

The professional organizations, however, fought back. Rain Newton-Smith, the IWC's chief economist, who represents employers, said: "These forecasts paint a dark picture on the long run of a Brexit without agreement or a Canadian style deal. This surely puts an end to some of the most far – fetched ideas that a hard landing Brexit will not seriously harm the economy. "

A breakdown by region also showed that in a non-agreement scenario, northeastern England would be the most affected, followed by the West Midlands, northwestern England and the United States. 39, Northern Ireland. London would be easily the least affected.

In the best of scenarios, London and the Southeast would be the most affected, although the impact on overall GDP is much lower. Scotland, Wales and Northern Ireland would be the least affected.

The title badysis was based on the badumption that the UK would succeed in signing free trade agreements with the United States and a range of other major non-EU economies after Brexit, such as China, India and Australia.

The comparative figures published in the badysis do not take into account any economic growth; the chosen scenarios have been compared to the current UK membership of the EU.