Boris Johnson's Brexit deal will cost the UK £70 billion, says think tank

30 October 2019, 09:53

Boris Johnson's deal will cost the UK £70bn, according to a think tank
Boris Johnson's deal will cost the UK £70bn, according to a think tank. Picture: PA

By Asher McShane

Boris Johnson's Brexit deal will deliver a £70 billion blow to the UK economy, according to a think tank.

A study by the respected National Institute of Economic and Social Research (NIESR) group says the UK’s economy will shrink by 3.5 per cent in 10 years time under the Prime Minister’s deal.

The researchers’ analysis has been put together on the basis that the UK will leave the bloc with a free trade agreement (FTA) with the EU after a transition lasting up to 2021 while negotiating new deals with other nations.

"We estimate that, as a result of higher barriers to goods and services, trade and restrictions to migration, the economy would be 3.5% smaller under Johnson's deal (FTA scenario) compared to continued membership in the EU customs union and single market," the authors wrote.

Opposition parties seized on the independent research as showing the damage Mr Johnson will do to the country, as they prepare for an expected December 12 election.

The Treasury defended the PM's proposals and said a "more ambitious" trade deal would be brokered with the EU than under the NIESR findings.

Mr Johnson widely criticised his predecessor Theresa May's deal, but the research suggests they will both have a similar negative impact on the economy.

"The estimated effect is very uncertain. It is similar to our estimate of the deal proposed by Mrs May's government because both involve an exit from the EU's single market and customs union," the study said.

Liberal Democrat Brexit spokesman Tom Brake said the figures "come as no surprise".

"We know that there is no deal as good as the deal we have currently as members of the EU. That is why the Liberal Democrats will keep fighting to stop Brexit," he said.

"The Tories' obsession with Brexit at any cost puts our future prosperity at risk. It is unconscionable that any Government would voluntarily adopt a policy that would slow economic growth for years to come.

"Boris Johnson's eagerness to push for such a damaging deal is shocking."

The SNP's Kirsty Blackman said the damaging deal would present a particular blow for Scotland.

"Boris Johnson's extreme Tory Brexit would be devastating for Scotland - destroying jobs and dealing a body blow to living standards, public services and the economy, which would leave the whole country poorer and worse off," the Aberdeen North MP said.

"Scotland has been completely ignored by Westminster throughout the Brexit process and we now face being dragged out of the EU against our will on the hardest terms - with Scotland singled out alone of UK nations for a raw deal that would take us out of the EU, single market and customs union and leave us at a competitive disadvantage."

The research suggested a no-deal Brexit would cause an even greater loss to the economy, with a 5.6% blow to GDP.

The NIESR said the economy is already estimated to be 2.5% smaller than it would have been without the UK having voted to Leave in the 2016 referendum.

A Treasury spokesman said: "A Brexit deal will give people and businesses the certainty they need to invest, which will support our economy.

"We are aiming to negotiate a comprehensive free trade agreement with the European Union, which is more ambitious than the standard free trade deal that NIESR has based its findings on."