Britain will be worse off under every Brexit option, Government analysis finds

The UK will be poorer in economic terms under any version of Brexit compared with staying in the EU, new official figures reveal.

Withdrawal under the Government’s plan could cut the UK’s GDP by up to 3.9% over the next 15 years. But the analysis produced by departments across Whitehall showed leaving without a deal could deliver a 9.3% hit.

Theresa May claimed Britain will be "better off" under her Brexit deal as she dismissed claims the country would be "poorer in the future than we are today".

ITV News Political Correspondent Carl Dinnen said the analysis shows the UK "would be better off than today, but less well off than it would have been in the EU".

  • What did the analysis look at?

The Government analysis did not attempt to forecast precisely the impact of Mrs May’s deal that has been backed by the EU and she is trying to get through the Commons.

Instead, it compares the likely impact of the proposals agreed by the Cabinet at Chequers in July and set out in the Government’s White Paper with the alternative scenarios of Norway-style membership of the European Economic Area, a Canada-style free trade agreement with the EU and a no-deal Brexit.

The 83-page document was drawn up by officials from Whitehall departments including the Treasury, the Department for Exiting the EU, Industry, Environment, International Trade and the Home Office.

  • What does it say?

The analysis said leaving the EU could cut the UK's GDP by up to 3.9% over the next 15 years.

But it said leaving without a deal could deliver a 9.3% hit to GDP over the same period.

The document did not put a cash figure on the potential impact on the economy, but independent experts have said that 3.9% of GDP would equate to around £100 billion a year by the 2030s, far outweighing the UK’s current contribution to EU budgets.

It also said that in all scenarios, national income will be reduced if migration from Europe is reduced from its current levels.

Potential outcomes range from a 0.6% reduction if the White Paper is accompanied by frictionless trade and unchanged migration levels to 9.3% if a no-deal Brexit reduces net immigration by European workers to zero.

The scenario which most closely reflects the Government's plan would see the Chequers deal tempered by some trade friction and with zero net immigration from the EEA. Under these conditions, GDP could be expected to be 3.9% lower 15 years after Brexit than it would have been if the UK remained. If frictionless trade was achieved, the cut would be around 2.5%.

GDP would be an estimated 1.4% lower with EEA membership and 4.9% with a Canada-style free trade agreement if migration levels remained the same, the document suggests. If net migration was cut to zero under a Canada-style deal the hit to GDP would be around 6.7%.

The North East, North West, Northern Ireland and West Midlands would be hardest-hit by a no-deal Brexit or a Canada-style FTA, while the pain would be more evenly spread under the scenario closest to Mrs May's deal, with London worst hit.

  • What has the reaction been?

In the Commons, Mrs May said the analysis did not mean the country would be "poorer in the future than we are today".

At Prime Minister's Questions, she told MPs: "Our deal is the best deal available for jobs and our economy, that allows us to honour the referendum and realise the opportunities of Brexit.

"This analysis does not show that we will be poorer in the future than we are today, no it doesn't, it shows we will be better off with this deal."

She claimed Labour leader Jeremy Corbyn and shadow chancellor John McDonnell were the "biggest risk to our economy".

Jeremy Corbyn said the forecasts were 'meaningless'.

Mr Corbyn said it was "not hard to be the best deal if it is the only deal," adding: "By definition, it's also the worse deal."

He continued: "The Government's economic forecasts published today are actually meaningless because there's no actual deal to model, just a 26-page wishlist."

However, Mr McDonnell hit back at Mrs May's claims, saying the "Conservative Party is unable to negotiate a deal in the way that we could".

Speaking to ITV News, Mr McDonnell continued: "I've not given up on the prospect of a General Election.

"If we can't get a General Election then yes, we'll be moving towards that consideration of another referendum.

"We'll be forced into that situation by the incompetence of the Government and the failure, basically of people to recognise that actually the Conservative Party is unable to negotiate a deal in the way that we could."

The Confederation of British Industry said the analysis showed the damage a no-deal Brexit or Canada-style deal would have on the economy.

Rain Newton-Smith, its chief economist, said: "It surely puts to bed some of the more far-fetched ideas that a hard-landing Brexit will not seriously hurt the economy.

"This is about real people's lives and jobs in the years ahead and it's clear to business that while the Government's deal is not perfect, it certainly fits the bill in reducing short-term uncertainty and opens up a route to a decent trade deal in the future."

  • What's next for the PM?

Having spent Tuesday campaigning in Wales and Northern Ireland, Mrs May will visit Scotland to argue that her agreement offers the prospect of an “unprecedented economic partnership” with the EU after Brexit.

At the same time, she will emphasise that it will mean Britain leaves the Common Fisheries Policy, enabling the country to decide who it allows to fish in UK waters.

While Mrs May continues to appeal directly to voters to support her plan, some questioned whether she would not have been better off remaining in Westminster trying to win over MPs who will decide whether to back the agreement in a vote on December 11.

  • ITV News correspondent Romilly Weeks

MPs will be now able to put down six amendments to the meaningful vote Brexit.

Commons Speaker John Bercow will select the amendments which will be debated and decided on by MPs.

They will be heard ahead of the scheduled vote on the Mrs May's highly controversial Brexit deal.

With scores of Tory MPs having declared publicly they will vote against the deal, and Labour and the other opposition parties also firmly opposed, ministers have acknowledged the parliamentary arithmetic is “challenging”.