The British economy will suffer a £252bn hit if Theresa May carries out her threat to leave the European Union with no deal, a new analysis of official forecasts shows.
A no-deal Brexit would see GDP plunge by more than a quarter of a trillion pounds over 15 years, according to the study shared with The Independent.
Less damaging exit terms, under which Britain would secure a free trade agreement with the rest of the EU, would still result in national output being £131bn lower over the same period.
And even a Government U-turn – leaving the UK in the EU single market and customs union – would swipe £52bn from economic growth, the calculation says.
The Best for Britain Group, which is campaigning to halt Brexit, said its research – based on the Government’s own leaked analysis – fully exposed the “Brexit black hole at heart of the economy”.
“Sadly, now we are seeing the economic analysis becoming project fact and it means that we are facing a massive Brexit blow,” said Lord Mark Malloch-Brown, the organisation’s chairman.
“Losing billions means we will have less cash for the NHS, our schools and our public services. This all shows the best option for communities up and down the country is to stay in and keep the deal we have.”
The calculation is the most comprehensive attempt yet to put a price on the economic damage forecast in the Treasury Brexit analysis which the Government was – eventually – forced to release to MPs.
It predicted a no-deal Brexit, leaving Britain trading with Europe on World Trade Organisation terms, would reduce growth by 8 per cent over 15 years.
Based on average GDP growth over the past 5 years, that would cut output from £2.62 trillion by 2033 to £2.36 trillion, Best for Britain calculated – a loss of £252.4bn.
This week, Theresa May’s spokesperson insisted the Prime Minister was committed to Brexit even if MPs vote down any deal she brings back, saying: “We are definitely leaving the European Union.”
Leaving with a Canada-style free trade agreement would see growth cut by 5 per cent which, the study says, which would mean a GDP loss of £130.8bn.
Meanwhile, staying inside the single market would reduce growth by 2 per cent – or GDP by £52.3bn, Best for Britain calculated.
Lord Mallach-Brown added: “This Government are not competent to deal with the challenges ahead. They are going to hit people in the pocket through their hapless handling of Brexit. Starkly, we are facing a Brexit bombshell for the economy.”
The organisation – which hit the headlines when it was revealed it is partly funded by billionaire financier George Soros – also calculated the hit to the public finances implied by the Government’s analysis.
It found tax revenue would plunge by £82.4bn over 15 years under a no-deal Brexit, by £42.7bn with a free trade agreement and by £17.1bn if there is a “soft Brexit”.
The first figure is almost identical to that set out in the Whitehall papers, according to some MPs who viewed them, bolstering the case for the Best for Britain projections.
The document also set out which regions will be hit the hardest, with the Leave-voting North-east of England and West Midlands expected to be the worst affected.
In a further blow to the Government, it also warned that the gains from free trade deals with other big countries would fail to compensate – a boost of just 0.2 per cent over 15 years from a deal with the US, for example.
A Government spokeswoman said the document was a “provisional internal analysis, part of a broad ongoing programme of analysis, and further work is in progress”.
She added: “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.”