Treasury report into ‘no deal Brexit’ leaked
In an illuminating and somewhat disturbing thread on Twitter from Jo Maugham QC, a major study undertaken by The Treasury has been revealed and the results make for fairly grim reading.
Following on from an almost constant stream of stories emerging from the government about its willingness to contemplate a ‘no deal’ Brexit or, perhaps more accurately, a ‘cliff-edge Brexit’ the report sheds some reality on a situation that many on the back benches of the Tory party appear to be praying for.
Chancellor Phillip Hammond has already been the subject of thinly veiled allegations of treason by serial climate change denier Nigel Lawson, to the audible laughter of anybody with an ounce of sense.
The Chancellor’s crime? Refusing to allocate millions of pounds worth of resources to prepare for a ‘no deal’ scenario. On the face of it some may consider this to be unreasonable but when reading Maugham’s revelations it may change some minds.
Bearing in mind that this was a report The Treasury itself commissioned, the facts are astonishing.
‘Wing-growers’ as Maugham refers to them (those who want to jump off a cliff and hope we grow wings) have failed to recognise that a ‘hard-Brexit’ would cause a ‘Major economic shock to the UK’. Quoting directly from the report, The Treasury estimate that after 15 years, moving to a World Trade Organisation model (WTO trade tariffs of roughly 20% on all exports) would mean a loss of GDP of £5,200 a year for every single UK household. This would translate into an annual loss of £45 billion in tax receipts.
It goes on to say that:
Relying solely on WTO tariffs would result in a significant reduction in the openness of the UK economy.
WTO rules would give us less access to the single market than Rwanda, Pakistan or Yemen
We would also lose preferential access to over 50 other countries across the world without access to the single market.
61% of our agricultural exports go to the EU. 7 of our 8 top agricultural export markets are in the EU. WTO tariffs on dairy averaged nearly 40% for lamb and 70% for some beef products. This could mean a rise in the cost of production of between 36-70%
WTO tariffs and rules are over 20 years old and out of date.
We’d have to abide by EU rules anyway. If our businesses want to export to the EU, they’ll have to abide by rules in which we now have no say. Anything that deviates from that would cost exporters significant profit.
Our exports have risen by over 30% since joining the EU, which made it easier for us to trade with the rest of the world.
Rather than the previously estimated 44% of our trade going to the EU, it’s actually 56%, as we trade with countries outside of the EU through the single market.
Over 80% of foreign investors see Brexit negatively and would see it as a reason to reduce or stop investment.
Nearly 30% of UK farms could go out of business without EU subsidies.
But still, we’re yet to be convinced by a government who lost an ‘un-losable’ election before almost burning itself from the inside is even fully aware of the risks of negotiating with the biggest trading bloc in the world, whilst pretending to be a powerhouse economy. We can only hope that sense and reason returns to the UK government in the near future.