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Brexit impact studies show North East and West Midlands will sustain biggest hit

London will take the smallest hit to economic growth from Brexit, according to Government studies.

Brexit impact studies released to MPs by the Government reveal the North East of England and West Midlands will sustain the biggest hit to economic growth from Britain’s withdrawal from the European Union.

London will take the least damage, according to the controversial forecasts which ministers were forced to release after they were leaked to the media and amid pressure from Labour and pro-EU Tories.

MPs have been reading the documents, which were prepared by the Department for Exiting the EU, under controlled conditions, but the figures have been leaked.

They are likely to be seized upon by backers of a “soft” Brexit to protect the economy, as Theresa May holds crunch meetings of her inner “war cabinet” of senior ministers on Wednesday and Thursday to thrash out what kind of trade relationship the UK will seek in negotiations.

The figures showed that the North East would take an 11% hit to economic growth under the Government’s preferred outcome of a free trade deal with the EU, while leaving with no deal will result in a 16% dip, and staying in the single market amounts to a 3% decline.

In the West Midlands, a free trade deal would result in an 8% hit to growth, compared with 13% under “no deal”, and 2.5% if the UK stays in the single market.

By comparison, London would sustain just a 2% hit to growth if the UK gets a free trade deal, 3.5% in a no deal scenario, and just 1% if the country stays in the single market.

Liberal Democrat Brexit spokesman Tom Brake said: “This is a damning outlook for Britain. The Tories are putting everything on the line because they do not care about the lives and livelihoods of the people of the UK.

“The Government need to start being clear what they are fighting for. They are still keeping no deal on the table despite how crippling it would be to the regional economy.

“People did not vote to make themselves poorer. They should be allowed a vote on the final deal and a chance to exit from Brexit.”

Earlier, Brussels released papers showing it wants to put in place a method to rapidly curtail the UK’s single market benefits if it breaches agreements on a transition deal.

But the Prime Minister insisted she would be “robust” in Brexit talks and dismissed “noises off” from the EU.

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Prime Minister Theresa May speaks during Prime Minister’s Questions in the House of Commons. (PA)

Asked during Prime Minister’s Questions if she would see off any “threats” from the EU, Mrs May said: “We will be robust in our arguments.

“As I have said right from the very beginning we will hear noises off, we will hear all sorts of things being said about positions that are being taken.

“What matters is the positions we take in the negotiations as we sit down and negotiate the best deal. We’ve shown we can do that. We did it in December and we are going to do it again.”

Ministers in the EU exit and trade (strategy and negotiations) sub-committee considered the issues of immigration and Northern Ireland on Wednesday and are expected to discuss the crucial issue of the UK’s future relationship with Brussels on Thursday.

Meanwhile, the European Court of Justice (ECJ) has been asked to consider whether Britons living in the 27 other EU member states can retain their rights as EU citizens following Brexit after a case was brought by expats in the Netherlands.

A Government spokesman said: “This document does not represent Government policy and does not consider the outcome we are seeking in the negotiations.

“As ministers clearly set out in the House, this is provisional internal analysis, part of a broad ongoing programme of analysis, and further work is in progress.

“We are seeking an unprecedented, comprehensive and ambitious economic partnership – one that works for all parts of the UK. We are not expecting a no deal scenario.”

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