Last week confidential government documents were leaked, showing the huge predicted economic damage to the UK after Brexit. Controversial predictions have detailed the damage to each UK region, that government chiefs are expecting when the UK formally leaves the European Union in March 2019. The Prime Minister has maintained that she has ‘no doubts’ over the prospects the UK has from outside the economic union.
According to the documents, London (which voted to remain) will suffer the least after March 2019. MPs and ministers have been permitted to view the documents prepared by government economists in private, but crucial figures have been leaked. London would take a two per cent knock to its growth figures in the event of a free trade deal compared to an 11% hit to North East England. These figures have infuriated many politicians who have argued that the impact of Brexit will further the North-South divide by stifling any growth in the North. This impact on the North East is surprising considering the region voted in considerable favour of leaving the Union.
The documents have also detailed how other regions will be affected. North Ireland is predicted to face an eight per cent drop in its growth under a free trade deal but is predicted to face a 12 per cent drop in growth figures in the case of a no-deal situation- a predicament that the Department for Exiting the European Union is trying to avoid. The prospects after Brexit are slightly worse in the West Midlands for example which is predicted to face an eight per cent loss in growth under a free trade deal and 13 per cent drop if there is no deal.
Comparatively, the East Midlands and East Anglia are both predicted to face a 5% drop in growth if the government can negotiate a free trade deal where-as the predictions show that there will be an 8.5 per cent drop if the Conservatives take us out of the EU without a trade deal. In Yorkshire the economy is predicted to experience a drop of five per cent with a free trade deal and only seven per cent if the UK leaves without a deal.
Many have seen the documents as a breach of trust from ministers who in December denied that economists were working for the government on impact forecasts after Brexit. The government was forced to reveal them to MPs after pressure in the House of Commons. Civil servants have reportedly spent months studying regional economies across the country by analysing the risk factors of the vote to leave. Government economists were reportedly studying ways in which Brexit may cause damage for example to key firms that operate in certain regions as well as whether the local economies would be likely to withstand the damage for example London is predicted to be less affected as it will be able to respond quickly to the changing economic landscape as it is a large economically diverse city. The North East is predicted to be the worst affected and is expected considering it is the most deprived region in the UK.
Remain-supporting pressure group, Open Britain (which is the successor organisation to Britain Stronger in Europe that campaigned during the referendum) tweeted last week that it is ironic that the governments ‘own’ assessments have predicted devastating impacts on the UK. Remain supporting MP, Chris Leslie tweeted that the public should’ve been made aware in advance of the assessments saying that the public has the ‘right to know’. Brexit supporting MPs have called the assessments ‘non-sense’ and have denied the damage that the government has predicted. The government have maintained they are optimistic and Theresa May confirmed last week at a London black tie campaigning ball that she is still sure that Britain will make a success of Brexit.
The Brexit Secretary David Davis, told MP’s last December in a highly-publicised committee hearing that the UK economy will face a ‘paradigm change’ similar to that experienced after the 2008 economic crisis which altered the landscape in the financial world. It is clear government ministers are considering these huge changes and the effect on individual UK regions. However, it is not clear whether civil servants will be using these assessments in order to create counter-economic policies to balance out the negative impact, a move that many would welcome.