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‘Britain worse off under any exit scenario’

Britain’s Prime Minister Theresa May.

Britain’s Prime Minister Theresa May.   | Photo Credit: REUTERS

Least harm would be done by remaining in the single market, says leaked report

Britain will be worse off under the three main scenarios of Brexit — whether it remains in the single market or leaves it with or without a new trade deal with the EU — a leaked government report revealed on Tuesday. The report, revealed by the news website Buzzfeed and which suggests the least harm would be done by remaining in the single market, was dismissed by the government and leading Brexiteers as “incomplete” and an attempt to “undermine” Brexit but will be a boost to those campaigning for a “softer” Brexit.

The report, “EU Exit Analysis — Cross Whitehall Briefing”, dated this January and prepared by the Department for Exiting the European Union, points to the three main scenarios: if Britain opted to remain in the single market, growth over the next 15 years would be 2% lower than if it remained in the union, but still better off by a “no deal” scenario (with Britain reverting to WTO terms for its relationship with the EU) under which growth would be 8% lower. Under a comprehensive free trade agreement, it would be 5% lower.

Short-term factors

The analysis does not take into account short-term factors such as the cost of adjusting to new customs arrangements, which could further dampen growth.

Among the hardest hit sectors will be those in which Indian companies are involved — cars and manufacturing — alongside others such as chemicals, retail, food and drink, while all regions of the country would be hit, particularly the North East and West Midlands, as well as Northern Ireland.

The hit to the British economy far outweighs the positives of future trade deals: it estimates that a deal with China, India, Australia and others would add in total 0.1 to 0.4% to the economy in the long term, while a trade deal with the U.S. could add 0.2%.

The report was leapt upon by government critics within and outside the Conservative Party. “Govt report says least damaging #Brexit model is#SingleMarket #CustomsUnion so let’s put country before ideology & stay in both,” tweeted Anna Soubry, a leading Conservative MP.

The leak also coincided with the release of a report criticising “Lexit”, the left-wing case for leaving the EU, calling for the Labour Party to clarify its stance on Brexit. Labour Minister for Exiting the EU Keir Starmer called on the government to urgently publish its impact analysis. Addressing the House of Commons on Tuesday, Minister Steve Baker described the leak as a “selective interpretation” of government analysis and an attempt to undermine Britain’s exit from the EU.

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Printable version | Jul 9, 2020 9:08:05 PM | https://www.thehindu.com/news/international/britain-worse-off-under-any-exit-scenario/article22597283.ece

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