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Brexit will make UK worse off, government forecasts warn Brexit will make UK worse off, government forecasts warn
(35 minutes later)
The UK will be poorer economically under any form of Brexit, compared with staying in the EU, government analysis suggests. The UK will be poorer economically under any form of Brexit, compared with staying in the EU, new government analysis suggests.
Official figures say the UK economy could be up to 3.9% smaller after 15 years under Theresa May's Brexit plan, compared with staying in the EU.Official figures say the UK economy could be up to 3.9% smaller after 15 years under Theresa May's Brexit plan, compared with staying in the EU.
But a no-deal Brexit could deliver a 9.3% hit, the new estimates say.But a no-deal Brexit could deliver a 9.3% hit, the new estimates say.
The prime minister said her deal was the best deal available for jobs and the economy. The prime minister said her deal was the best one available for jobs and the economy.
Speaking at Prime Minister's Questions, Mrs May said: "Our deal is the best deal available for jobs and our economy, that allows us to honour the referendum and realise the opportunities of Brexit." "Our deal is the best deal available for jobs and our economy, that allows us to honour the referendum and realise the opportunities of Brexit," Mrs May said at Prime Minister's Questions.
The government's Brexit deal faces a potentially difficult vote in the House of Commons on 11 December.The government's Brexit deal faces a potentially difficult vote in the House of Commons on 11 December.
Before that vote the prime minister is touring the country to promote the deal and will be in Scotland later on Wednesday. Before that Mrs May is touring the country to promote the deal and was due to be in Scotland on Wednesday afternoon.
The 83-page document does not attempt precisely to forecast the impact of Mrs May's deal. What do the forecasts show?
But it compares the likely impact of the proposals agreed by the Cabinet at Chequers in July and set out in the government's White Paper with the alternative scenarios of Norway-style membership of the European Economic Area, a Canada-style free trade agreement with the EU and a no-deal Brexit. Confusingly the 83-page document does not forecast the impact of the prime minister' current deal.
The economy will expand under all the scenarios. Instead it looks at the potential impact of the proposals agreed by the Cabinet at Chequers in July, which is the basis of the current proposal.
However, the report found that after 15 years, under all Brexit scenarios, the economy would still be smaller than if the UK had remained in the European Union. Under those circumstances the economy would be 3.9% smaller than if the UK had remained part of the European Union.
The estimates do not put a cash figure on the potential impact on the economy, but independent experts have said that 3.9% of GDP would equate to about £100bn a year by the 2030s.
The government report also examines three other possible scenarios: a Norway-style membership of the European Economic Area; a Canada-style free trade agreement with the EU; and a no-deal Brexit.
The economy will continue to grow under all the scenarios, but there is a wide variation in how much.
What is the political reaction?
Former Brexit Secretary David Davis questioned the research, saying previous Treasury forecasts had been proved wrong and were based on "flawed assumptions".Former Brexit Secretary David Davis questioned the research, saying previous Treasury forecasts had been proved wrong and were based on "flawed assumptions".
The Treasury estimates do not put a cash figure on the potential impact on the economy, but independent experts have said that 3.9% of GDP would equate to about £100bn a year by the 2030s. Chancellor Philip Hammond said the planned Brexit deal combined most of the economic benefits of remaining in the EU with the political benefits of leaving the EU.
Mr Hammond said the planned Brexit deal combined most of the economic benefits of remaining in the EU with the political benefits of leaving the EU. Asked if the UK would be poorer under Mrs May's deal, he said: "The economy will be slightly smaller in the prime minister's preferred version of the future partnership."
Asked if the UK would be poorer under Mrs May's deal, the chancellor said: "The economy will be slightly smaller in the prime minister's preferred version of the future partnership." But Mr Hammond argued that staying in the EU was not politically "viable".
But he argued that staying in the EU was not politically "viable". What about trade deals?
Veteran Conservative Eurosceptic Sir Bill Cash said Mr Hammond was effectively arguing for the UK to stay in the European Union in his "extraordinary" statement.Veteran Conservative Eurosceptic Sir Bill Cash said Mr Hammond was effectively arguing for the UK to stay in the European Union in his "extraordinary" statement.
He said the chancellor had ignored potential economic benefits of leaving the EU, asking: "What about the trade deals which could give us the most enormous opportunities throughout the world, if we are able to strike them?"He said the chancellor had ignored potential economic benefits of leaving the EU, asking: "What about the trade deals which could give us the most enormous opportunities throughout the world, if we are able to strike them?"
Under Mrs May's deal, the UK would be able to negotiate trade deals during the transition period after 29 March's Brexit day, but would not be able to implement them until the end of the planned 21 month transition period, which could itself be extended. Under Mrs May's deal, the UK would be able to negotiate trade deals during the transition period after 29 March's Brexit day, but would not be able to implement them until the end of the planned 21-month transition period, which could itself be extended.