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The UK government admits Brexit will inevitably leave Britain poorer

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Philip Hammond
Philip Hammond
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  • The UK government release new economic assessments
    showing all Brexit outcomes will leave Britain worse off than
    remaining in the EU.
  • The Chancellor Philip Hammond says that “purely from an
    economic point of view” it would be better to remain.
  • However, he says May’s deal would only leave Britain
    “very slightly” worse off.
  • He says the government may have to reconsider leaving
    the Single Market if May’s deal is defeated in
    Parliament.

LONDON — Brexit will inevitably leave Britain worse off than had
it remained in the EU, the UK Chancellor Philip Hammond said on
Wednesday.

Hammond has previously
repeatedly insisted
that “when the British people voted
[in the EU referendum] they did not vote to become
poorer.”

However, Theresa May’s government will today release official
assessments showing that he UK economy will be hit under all
likely Brexit outcomes.

They are expected to show that:

  • GDP will be 1-2 percent lower, than if Britain had
    stayed in the EU, after 15 years under May’s deal
  • A no-deal scenario would leave GDP 7.6% lower than
    remainin in the EU over 15 years.
  • A Norway-style relationship would leave Britain 1.4
    percent worse off.
  • A Canada-style free trade deal would leave GDP 4.9 %
    lower than if Britain had remained.

Speaking on the Today programme, Hammond said there would
inevitably be a cost to any form of Brexit.

“Purely from an economic point of view there will be a cost to
leaving the European Union,” Hammond said.

“If you look at this purely from an economic point of view there
will be a cost to leaving the European Union because there will
be impediments to our trade.”

The analysis, set to be released in full on Wednesday morning,
will show that leaving the EU without a deal would cost the
British economy £150 billion over 15 years. 

By contrast, Hammond said that May’s deal would only leave
the economy “very slightly smaller” than if Britain had remained
in the EU.

The Chancellor also suggested that the government could be
forced to change course and back an alternative form of Brexit,
including a Norway-style Brexit in which Britain remains in the
single market, if May’s deal is defeated.

“If that is rejected then we will have to review the
options,” he said.

“We will have to look at the parliamentary arithmetic and
see what is the best way to proceed.”

Hammond said remaining in the Single Market would leave
Britain at an “economic advantage.”

“If you look purely at the economics, then remaining in the
Single Market would give us an economic advantage yes,” Hammond
said.

Hardline Brexiteers in Hammond’s Conservative party accused the
Treasury of seeking to undermine Brexit.

“The reputation of government economics is in the gutter. That
must change. It’s time for the Chancellor to publish all his
assumptions and full model documentation so we can begin the
process of recovery,” former Brexit minister Steve Baker said.

“We’ve all had about enough of Project Fear,” former
International Development Secretary Priti Patel said.

“We were told during the referendum campaign that we’d each lose
£4,300 and that there would be a recession and higher
unemployment. And yet we’ve seen record wage growth and record
employment levels.

“If ministers spent time preparing for a no deal scenario, rather
than dreaming up silly scare stories, we could all make a success
of our post-Brexit future.”

Our Brexit Insider Facebook group is the best place for up-to-date news and analysis about Britain’s departure from the EU, direct from Business Insider’s political reporters. Join here.

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