Britain’s departure from the European Union could boost GDP by up to 4 per cent, a group of pro-Brexit economists have claimed.
Economists for Free Trade yesterday published an alternative analysis of the impact of Brexit that is designed to rival a leaked Whitehall study. They claim that the latter was a “gloomy” assessment based on a model that had not used all relevant data.
The group claimed that officials had failed to take into account the government’s preferred option for a Brexit deal, based on an enhanced version of the EU‘s agreement with Canada.
The Whitehall study forecast that Britain’s economy would fare worse under every Brexit scenario. A no-deal scenario, which would see Britain revert to World Trade Organisation rules, would reduce growth by eight per cent over the next 15 years compared with staying in the EU, it said, and it predicted that under a comprehensive free trade agreement between Britain and the bloc, growth would be five per cent lower. The “softest” Brexit scenario, by which the UK retained access to the single market, would see growth reduced by two per cent.
Economists for Free Trade projected in their analysis that GDP would increase by at least two per cent over the decade and a half after Brexit, compared with staying in the EU. However, some commentators have challenged the conclusion in their report because it was based on the dual assumptions that leaving the EU and deregulation have no costs, but only advantages. Many economists believe that there will be costs associated with both.
The pro-Brexit group said that its analysis would be presented to cabinet ministers at a meeting today, adding: “The new study offers valuable ammunition to pro-Brexit ministers gathering at Chequers on Thursday and seeking to resist pressure from the Treasury for Britain largely to remain in lockstep with the EU after it formally leaves the 28-member bloc in March 2019.”
Eleven ministers are to meet today at Chequers in an attempt to reach an agreement over the government’s Brexit strategy.
Iain Duncan Smith, the pro-Leave former Tory leader, added: “This new study by some of our most respected economists, who have been right in the past on key issues such as the euro and the immediate effects of Brexit, deserves to be taken very seriously. “It suggests that we should all be highly sceptical of Project Fear Mark 2 — the Treasury-led operation by Whitehall officials to discredit Brexit and browbeat ministers into the softest of departures from the EU.
To read The Times’s report in full, click here.