The report, ‘EU Exit Analysis – Cross Whitehall Briefing’, outlines three of the most likely scenarios, and brings only bad news for Britain. Growth for the UK will falter in any case, the report says.
According to the report, which has been obtained by Buzzfeed, Britain’s growth would be 5 percent lower over the next 15 years – compared to current forecasts – under a comprehensive free trade agreement with the EU. A ‘no deal’ scenario would reduce growth by 8 percent over that 15 year period.
The softest Brexit option – to continue single-market access through membership of the European Economic Area (EEA) – would still lower growth by 2 percent.
The assessment is currently being kept under lock and key inside government, and will reportedly be presented to key ministers in one-on-one meetings this week ahead of discussion at the Brexit cabinet subcommittee next week.
The report, prepared by Whitehall officials for the Department for Exiting the European Union (DExEU), will not be made public “because it’s embarrassing,” according to the DExEU official.
The analysis also warns that every UK region would be negatively impacted in all modeled scenarios, with the North East, the West Midlands, and Northern Ireland facing the biggest falls in economic performance. That’s before a hard border for Ireland is even considered.
Overall, the biggest hit comes from the UK’s decision to leave both the EU’s customs union and the single market. Leaving these arrangements creates what the report had called “non-tariff barriers” to trade, such as loss of market access in some sectors and new customs and border checks.
Some of the losses can be minimized if the UK chose to remain in the single market via the EEA. That way any impact can be partly offset through domestic policy or trade deals with the US and others.
The leaked report suggests that there could be opportunity for Britain to strike trade deals with other non-EU countries. However, the assessment also sheds doubt that the benefits would be enough to outweigh the losses to the economy caused by leaving the single market and customs union.
Moving away from the current set of rules and standards would also make it more difficult to trade with the EU in the future, and would ruffle domestic political feathers.
The explosive report is a tough pill to swallow – especially after Brexit Secretary David Davis tried to hoodwink the public in 2016 over what economic impact studies the Tory government had actually carried out. (Spoiler alert: there was none).
Davis suggested that dozens had been carried out “in excruciating detail,” but after a Commons vote would force him to publish the assessments, he revealed that the impact studies did not exist after all. Instead, DExEU published a series of broad “sectoral analyses.”