This article is from the source 'independent' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.independent.co.uk/news/business/news/brexit-latest-news-lost-tax-revenue-treasury-productivity-growth-rate-obr-office-budget-a7838891.html
The article has changed 8 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Brexit could cost UK Treasury tens of billions in lost tax revenue, says Office for Budget Responsibility | Brexit could cost UK Treasury tens of billions in lost tax revenue, says Office for Budget Responsibility |
| (35 minutes later) | |
| The Treasury's official watchdog has highlighted the significant risk posed by Brexit to the UK's public finances in a new report. | The Treasury's official watchdog has highlighted the significant risk posed by Brexit to the UK's public finances in a new report. |
| The Office for Budget Responsibility, in its "Fiscal Risk Report" published on Thursday, said that if Brexit ended up reducing the UK's annual trend productivity growth rate by just 0.1 per cent over 50 years, the economy would be 4.8 per cent smaller than otherwise. | |
| That would be equivalent to a cost in lost GDP of almost £100bn in today's money - which would translate into a £36bn hit to tax revenues. | That would be equivalent to a cost in lost GDP of almost £100bn in today's money - which would translate into a £36bn hit to tax revenues. |
| The OBR said there was "no meaningful basis" on which to predict the outcome of the Government's Brexit talks in terms of the UK's future trade arrangement, and so it has not assumed any long term hit to the UK's productivity growth rate in its current official forecast. | The OBR said there was "no meaningful basis" on which to predict the outcome of the Government's Brexit talks in terms of the UK's future trade arrangement, and so it has not assumed any long term hit to the UK's productivity growth rate in its current official forecast. |
| However, many private sector forecasters have downgraded their potential productivity growth forecasts for the UK due to the decision to leave the EU, some by as much as 0.3 per cent. | However, many private sector forecasters have downgraded their potential productivity growth forecasts for the UK due to the decision to leave the EU, some by as much as 0.3 per cent. |
| Bank Berenberg has downgraded its base case estimate for UK potential productivity growth from 2.1 per cent to 1.8 per cent due to Brexit. | Bank Berenberg has downgraded its base case estimate for UK potential productivity growth from 2.1 per cent to 1.8 per cent due to Brexit. |
| Combining that with the OBR's estimates implies a £100bn hit to tax revenues over the next half century. | Combining that with the OBR's estimates implies a £100bn hit to tax revenues over the next half century. |
| Theresa May's Government has not commissioned a report on the long-term economic impact of Brexit, but before last June's referendum the Treasury produced an analysis which argued that leaving the EU would impact negatively on the UK's productivity growth by reducing EU trade and curbing foreign investment in the UK. Both are seen as having an outsized impact on productivity. | Theresa May's Government has not commissioned a report on the long-term economic impact of Brexit, but before last June's referendum the Treasury produced an analysis which argued that leaving the EU would impact negatively on the UK's productivity growth by reducing EU trade and curbing foreign investment in the UK. Both are seen as having an outsized impact on productivity. |
| "Any alternative to EU membership that substantially reduced guaranteed access to EU markets would [...] have a negative impact on UK GDP, productivity, employment and tax revenue," it said. | "Any alternative to EU membership that substantially reduced guaranteed access to EU markets would [...] have a negative impact on UK GDP, productivity, employment and tax revenue," it said. |
| Other analysts argue that reduced immigration to the UK, which could follow Brexit, would also negatively impact on UK productivity growth. | Other analysts argue that reduced immigration to the UK, which could follow Brexit, would also negatively impact on UK productivity growth. |