Behind the Headlines

UPDATED: "UK could gain £80 billion from no-deal Brexit": really?

Written on 09/10/2018

What’s the story?

The UK could receive an £80 billion boost if it leaves the European Union without a deal and reverts to World Trade Organisation terms. Read more in i News.

UPDATE: Jacob Rees-Mogg is now claiming a no-deal Brexit would boost the UK economy by £1.1 trillion over the next 15 years. Read more in the Telegraph

How reliable is the story?

Rubbish. Economic forecasts overwhelmingly predict a significant hit  to the economy if the UK leaves without a deal, not a ‘Brexit dividend’.

What’s the background?

  • A research paper from Economists for Free Trade and backed by the European Research Group, comprised of Eurosceptic Conservative MPs, claims that the UK will get an £80bn boost over 15 years from leaving the EU without a deal. Evidence

  • Although the groups prefer a Canada-style Free Trade Agreement, they argue that reverting to WTO rules will provide an economic stimulus to the UK, increasing customs revenues by £13 bn a year. Evidence

  • However, no other body has claimed that a no-deal Brexit would benefit the UK; the International Monetary Fund predicted a no deal would cost the UK 4% of its GDP. Evidence

  • Meanwhile, the Organisation for Economic Co-operation and Development (OECD) predicts a 5.1% hit to GDP over the next 15 years, London School of Economics predicts a 9.5% hit, and the government’s own Brexit analysis predicts that the UK will lose 10.3% of GDP. Evidence

  • Moreover, if the UK reverts to WTO rules, customs checks and tariffs will be introduced overnight, adding to the cost of everyday products such as cheese, where tariffs are up to 44%, chicken, at 22%, and apples at 15%. Evidence

  • Although not all tariffs will be passed onto the consumer, prices are still predicted to rise by roughly 10%. Evidence

This Behind the Headlines Briefing was first published on the DoorstepEU app: