Treasury coffers will take a £66 billion annual hit if Britain goes for a ‘hard Brexit’, according to leaded government papers. The draft Cabinet papers, seen by The Times, is based on forecasts from a study initiated by George Osborne during the referendum campaign.
The papers suggest that leaving the single market and switching to World Trade Organisation (WTO) rules would cause GDP to fall by up to 9.5% compared with if the country remained in the EU.
The documents says: “The Treasury estimates that UK GDP would be between 5.4% and 9.5% of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5%.”
It adds: “The net impact on public sector receipts – assuming no contributions to the EU and current receipts from the EU are replicated in full – would be a loss of between £38 billion and £66 billion per year after 15 years, driven by the smaller size of the economy.”
Brexit supporters who have seen the documents told the newspaper the figures were unrealistic and claimed there was a push to make leaving the single market look bad.
Former Conservative minister Anna Soubry, a supporter of the Open Britain campaign, said: “The horrific damage of a hard Brexit is clear. Less tax revenue means less to invest in schools and hospitals, lower trade and investment means businesses and jobs at risk. This danger is precisely why Parliament must be involved in the principles to guide the Brexit negotiations.
“Britain will leave the EU, but we must do so in a way the protects our prosperity and reduces risk. The government should now make clear the ‘WTO option’ isn’t on the table.”