The Humber will be much poorer in every Brexit scenario - analysis
By Hull Daily Mail | Posted: 29 Nov 2018
The verdict is in – every Brexit scenario will make the UK poorer.
That is according to the government’s own analysis of each possible Brexit outcome.
A team of cross-departmental wonks have been putting together economic modelling to understand what impact Brexit could have on the economy in the 15 years after leaving the European Union.
Their findings state that the UK economy could be up to three per cent smaller after under Theresa May's Brexit plan, compared with staying in the EU. A no-deal Brexit could deliver a 9.3 per cent hit, the new estimates say.
Yorkshire and the Humber would not be spared the impact either, with the report suggesting the region’s economic growth could shrink between 0.25 and 8.5 per cent, depending on whether the country exits with a deal or not.
Here are what the rest of the predictions suggest.
The PM’s Brexit deal has not actually been analysed
Theresa May's Brexit deal has not been analysed in the report (Image: Getty Images)
The difficulty with handing your homework in late is that it doesn’t always give the teacher enough time to mark it – and that is the case with the PM’s Brexit terms.
The future trading plan, signed-off on Sunday by EU leaders, was vague and so those carrying out the analysis have not had time to put its intentions into their economic model.
Instead, they have used the Chequers model, the idea of following EU rules when trading goods but being outside the single market and customs union – a concept derided by many and which caused East Yorkshire MP David Davis to resign from the Cabinet.
What has been looked at by the economists?
They have reviewed the long-term impact of four different post-Brexit outcomes:
1) Theresa May’s Chequers plan (both without border checks and 50 per cent border checks)
2) A Norway-style deal where the UK stays in the single market and free movement continues
3) A Canada-style free trade agreement (FTA) where some border checks would be required
4) A no-deal Brexit
And in what state will each outcome leave the economy?
All the Brexit scenarios will leave the economy in a worse state than if the UK remained in the EU, according to the government figures
The top line here is that every one of those outcomes will leave the UK poorer, according to the official statistics.
The economy will continue to grow but it will be at a slower rate than if the country remained a member of the EU.
Over a 15-year period (and depending on the immigration policy):
Chequers – would see GDP take a hit of between -0.1 per cent and -3.9 per cent
Norway/single market – GDP could grow between -0.9 and -2.3 per cent less
Canada FTA – GDP could take a hit of between -3.4 and -8.1 per cent
No deal – GDP could take a hit of between -6.3 and -10.7 per cent
What does that actually mean in monetary terms?
The 82-page report, which the Treasury agreed to release after pressure from MPs, does not give monetary values, but external economists indicate the UK economy could be worth between £60bn to £100bn less by the 2030s if these stats are correct.
A no-deal scenario would leave Britain worst off, costing nearly £200bn, say commentators.
Cutting migration will make us poorer
It is an argument that has been made many times, including in the referendum two years ago, but the report puts it in black and white – migration is a boost to the UK economy.
One of Mrs May’s core promises going into the Brexit talks, however, was to end free movement as she considered immigration one of the main factors behind the leave vote in 2016.
“Changes to migration will have an impact on the economy,” the report authors say. Restricting the number of EU workers coming to the UK could “reduce GDP by around 1.8 per cent and GDP per capita by around 0.6 per cent in the long run, compared to today's arrangements”, they write.
What does this all mean for the area?
Yorkshire and the Humber's economy will grow less strongly outside the EU, according to the government statistics (Image: Tony Evans)
The government team of economists have not been so kind as to give us a by-local authority breakdown on the regional Brexit impact, but it has analysed how Yorkshire and the Humber could be affected as a whole.
According to their stats, over the next 15 years:
Chequers – could see GDP grow less fast, by -0.25 per cent
Norway/single market – could see GDP take a hit of -1.3 per cent
Chequers, but with added trade barriers – could see GDP growth shrink by 2 per cent
Canada-style FTA – GDP growth could shrink by 5.5 per cent
No-deal – GDP could take a hit of -8.5 per cent
But surely all the extra world trade after Brexit will counter these negative forecasts?
It seems not, if you believe the analysis – and a number of independent economists say their workings look fairly robust.
There have been some assumptions made on what new trade deals with the US, China and others could look like but, altogether, they would add only 0.2 per cent to the economy, according to this report.
For those calling for a second referendum and to stay in the EU, these stats will be like an early Christmas present.
But for the PM, who is still trying to persuade huge swathes of her backbenches to support her deal, her mission just got a whole lot more difficult.
Some gains could, however, be seen in ports, as trade shifts up the country from the congested south to avoid potential backlogs.
Fishing became the 'flotilla issue' seen on the Humber and the Thames, as part of the leave campaign, there could be some return, but most is likely to benefit Peterhead, where the UK fleet is now centred.