Sayeed Muhammad of DOT
The British government’s Brexit deal will leave the UK £100bn worse off by 2030 than if it had remained in the EU, a study says.
The National Institute of Economic and Social Research (NIESR) conducted the study, reports BBC, adding, it commissioned by the People’s Vote, which wants a second referendum, said GDP would be 3.9% lower.
“This is the equivalent of losing the economic output of Wales or the City of London,” the study said, with Chancellor Philip Hammond describing the deal as better than staying in the EU.
Approved by the EU on Sunday, the withdrawal agreement sets out the terms of the UK’s exit from the EU, including its £39bn “divorce bill”, citizens’ rights and the Northern Ireland “backstop” – a way to keep the Irish border open, if trade talks stall.
NIESR’s research says the government’s preferred outcome – leaving in March 2019 and entering a transition period lasting until December 2020 before moving to a free trade agreement – would lead to a huge reduction in trade and investment.
This is largely because leaving the single market would create “higher impediments” to services trade, making it less attractive to sell services from the UK, it said.
By 2030, at the end of the first decade outside the EU, the research predicts that GDP per head would fall by 3%, amounting to an average cost per person of £1,090 at today’s prices.
It also estimates that total trade between the UK and the EU would fall by 46%.
The report also modelled alternative Brexit outcomes against staying in the EU.
This showed that remaining in a customs union beyond the transition period, possibly through invoking the so-called Irish “backstop”, would still mean a hit of £70bn by 2030.