Exiting the EU impact assessments warn of the true cost of Brexit

Labour Party

The FT reports today that Brexit will hit five sectors hardest in the EU, while in the UK smaller companies and specific regions will be “disproportionately affected.”

The research, published by Oliver Wyman and Clifford Chance law firm, found that the hardest hit sectors following Brexit will be financial services, automotive, agriculture, food and drink, chemicals and plastics which are heavily dependent on EU trade.

This corroborates the release of the document by the chair of the House of Commons Exiting the EU Committee, Hillary Benn, which also published its economic impact of Brexit last week.

Even taking into consideration the admission by the reports authors that economic modelling in this way is difficult and contains uncertainties it is of concern that the Government and others continue to dismiss and/or refute the “best case scenarios” put forward.

The Committee’s report predicts that between -1% and -12.5% will be wiped off the growth of the UK economy in the long term, under the government’s current plans for a wide-ranging free trade agreement. Even leaving the EU but remaining in the single market results in growth between 1.1% to -10% over the course of 15 years.

Meanwhile the assessment published by the firms Oliver Wyman and Clifford Chance found that potential non-tariff barriers would have a much more significant effect on companies than tariffs.

Reporting in the FT, the research calculated that if a future customs arrangement was in place, equivalent to the current customs union then the impact of Brexit would be reduced to £14bn for the EU and £17bn for the UK.

While it must be accepted on both sides that these are estimates only, it would be foolish to claim that Brexit will have no economic impact at all, and the potential that the impact will be significant  is, obviously, a real threat to the UK economy.