'Hard Brexit' could cost £66bn each year, leaked documents say
A ‘hard Brexit’ split with the EU could cost the Treasury £66 billion each year, ministers have been warned.
Leaked government papers suggest leaving the single market, resorting to World Trade Organisation rules, would cause GDP to fall by up to 9.5%, compared with remaining inside the EU.
The draft Cabinet committee paper seen by The Times is based on forecasts from a study into the impact of quitting the EU, published by George Osborne in April.
Although the then-chancellor faced criticism over the report, the Treasury stands by its calculations, according to The Times.
The document says: “The Treasury estimates that UK GDP would be between 5.4% and 9.5% of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5%.”
It adds: “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy.”
Brexit supporters who have seen the documents told the newspaper there was a push to “make leaving the single market look bad”, but prominent Remain campaigners said they showed the “horrific damage” of leaving.
Conservative former minister Anna Soubry said: “The horrific damage of a hard Brexit is clear. Less tax revenue means less to invest in schools and hospitals, lower trade and investment means businesses and jobs at risk.
“This danger is precisely why Parliament must be involved in the principles to guide the Brexit negotiations.
“Britain will leave the EU, but we must do so in a way the protects our prosperity and reduces risk. The Government should now make clear the ‘WTO option’ isn’t on the table.”
A Government spokesman said: “We want the best outcome for Britain.
“That means pursuing a bespoke arrangement which gives British companies the maximum freedom to trade with and operate in the single market, and enables us to decide for ourselves how we control immigration.”