It’s official then, written down in black and white in the government’s own report. Any type of Brexit – including Theresa May’s deal – will make us poorer.
That kills dead the “Brexit dividend” idea Theresa May continues to flog. In fact, we’ll have less money than we would have done for things like the NHS, housing or investing in our communities. The knock to the public finances will dwarf many times over any cut in our membership fee.
Philip Hammond tried to put a brave face on it this morning. While admitting that staying in the EU would be “a better outcome for the economy”, the chancellor insisted May’s deal was “very close” to the economic benefits of being in the EU.
That’s stretching the truth. He’s referring to calculations based on May’s “Chequers plan”. But this no longer exists, ditched after Tory rebellions and further concessions to the EU. The government’s analysis also makes hugely optimistic assumptions about trade with the EU after we leave, and assumes we’ll get quick trade deals with other countries. Just look at Donald Trump’s comments this week to see how difficult this will be.
Another scenario in the report more accurately reflects where May’s deal is likely to end up – with more regulatory barriers for our trade with the EU and tighter controls on the movement of EU workers. That predicts a 3.9% hit to our GDP in 15 years. Independent experts have said that would equate to about £100 billion a year by the 2030s.
Contact your MP. Ask them to reject the deal and demand a People’s Vote!
Less money means less to spend on real-life priorities: healthcare, social care, housing, transport, police and much else. A smaller, less dynamic economy also means fewer opportunities for jobs.
The government’s analysis torpedoes May’s relentless insistence that “we can spend taxpayers’ money on our own priorities” because we’ll stop the “vast annual payments” into the EU budget. This was also front and centre of Brexiters’ arguments during the referendum.
But our £8 billion a year net contribution to the EU will not go to zero post Brexit because the prime minister is prepared to pay to stay in the bloc’s crime-fighting, science and student exchange programmes among other things. The government hasn’t told us what this will cost but it will certainly be in the billions – and so the saving on our membership fee could be pretty small.
One can’t compare this exactly to the forecast £100 billion knock to the economy. After all, that’s a 15 year projection and public expenditure accounts for only 39% of our economy. But whichever way you cut it, there will be far less money to spend.
So the prime minister isn’t being honest when she talks about the £394 million a week of extra investment into the NHS. At least the health secretary admitted yesterday that this money would be spent on our health service whatever the Brexit outcome. Wherever the government rustled it up from, it’s not May’s fantasy “Brexit dividend”.
Brexit will make us poorer in the long run. The opposite was promised during the referendum campaign. Now we can see the truth, the public deserve a People’s Vote on the Brexit reality. As Philip Hammond himself once said: “People did not vote to become poorer.”
Edited by Hugo Dixon
So to take back control of 8 billion pounds per year we pay 100 billion pounds per year. What’s not to like?
I get a sense of deja vu here. It has been known for a long time that Brexit will make us poorer, other reports in the past have repeatedly confirmed it, yet it keeps coming out in the news as if it’s a new revelation.
Still, I suppose repetition doesn’t hurt, in case there are still people who have yet to get the message.
Who will come to our rescue? The Tories don’t like brown people and Corbyn doesn’t like foreign (or any) banks.
Will Corbyn support this deal because of his ideology? Will he abandon us in our hour of need?
She should be in there fighting tooth and nail to protect us and yet all we are getting is a bit of ummming and ahhhing.
Corbyn has put a mussel on Starmer and has limited his power to fight for us. What on earth is going on?