Just 23% of voters think the weekly cost of leaving the EU would be worth paying
The government’s preferred Brexit scenario would leave the UK public finances £615m per week worse off than staying in the EU, according to new analysis.
That would mean the country has the equivalent of almost £1bn per week less to spend on public services than the £350m positive benefit that the Leave campaign claimed would result from leaving the EU.
A study for the think tank Global Future carried out by Jonathan Portes, a professor of economics at King’s College, London, looked at each of the three scenarios assessed by the government in its own leaked analysis.
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Using that analysis, the new research calculates that the government’s preferred option of a “bespoke deal” would mean about £40bn more in annual public borrowing than under the status quo by 2033/34 – the same time period over which the government worked out its impact assessments
That equates to £615m per week, or 22 per cent of the NHS budget, after translating that into today’s prices, the research claims.
It bases this scenario on the Prime Minister’s recent Mansion House speech which outlined the Brexit she hopes to deliver.
This would mean leaving the single market and customs union whilst maintaining access to EU markets with minimal tariff and non-tariff barriers. It would also include the flexibility to diverge from Brussels regulations, negotiate trading relationships with other non-EU countries and implement restrictions on immigration.
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The research estimates that this outcome would leave the country better off than a no-deal Brexit but worse off than under the “Norway model” or under an average free-trade agreement such as the one Canada has with the EU.
The Norway model, in which the UK would stay in the single market and adhere to EU rules and regulations but leave the customs union, would have a negative fiscal impact of £262m per week while the Canada option would cost around £877m per week, Mr Portes finds.
The figures are the equivalent of 9 per cent and 31 per cent of the current NHS budget respectively. A no-deal Brexit in which the UK trades with the EU under World Trade Organisation terms is estimated to cost £1.25bn per week. No scenario is more beneficial than staying in the EU.
The analysis takes into account the benefits from lower financial contributions to the EU budget and a new trade deal with the US as well as costs arising from new customs controls, tariffs, and reduced migration.
A survey conducted as part of the research found that 72 per cent of Leave voters thought that £615m a week would be too high a price to pay for a bespoke Brexit deal, while 78 per cent said it was worse than they had hoped for when they cast their vote in June 2016.
Among all EU referendum voters polled, just 23 per cent said they thought the estimated cost would be worth paying.