The government's internal assessment of the impact of leaving the EU has now been published by the Brexit Select Committee - in the interests of transparency. You can see it HERE. Unfortunately, the pdf is not the original so some of the detail is not entirely clear but nonetheless you can see that it represents a huge amount of work and is quite a polished document.
It isn't something knocked together in an afternoon and it isn't even based on the gravity model of international trade, which some Brexiteers have criticised, instead using something called the Computational General Equilibrium (CGE) model. It claims to be a state-of-the-art model of the economy, although no doubt the Brexiteers will condemn it as rubbish.
You can see the authors had some trouble determining what the outcome of the negotiations will be - and they're on the inside! So, they based the assessment on three possible outcomes:
- An EEA type agreement (of the kind we've already ruled out)
- An FTA
- Using WTO rules but doing it smoothly (i.e. not crashing out)
Under all the scenarios we are the losers. The percentage change in potential output relative to the status quo is a loss of 1.8%, 5% and about 8% respectively. So, at the moment we are looking at a 5% cut in GDP, equal to about £100 billion a year.
More than that, even taking into account the savings from not paying into the EU budget and extra GDP growth through a free trade deal with the USA, government borrowing RISES in every case. So, far from having more money to invest in the NHS there will be LESS and either we will need to borrow more or pay higher taxes.
Every sector and every area of the UK is impacted negatively with the North East the worst affected.
Watch out for Economists for Brexit arguing that it's all wrong.
