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Leaked government Brexit paper suggests UK economic hit Ministers play down leaked Brexit study
(about 4 hours later)
The UK economy will grow more slowly outside the European Union, no matter what deal is struck with Brussels, a leaked government document suggests. Ministers have sought to play down the leak of a government document predicting an economic hit from Brexit.
BuzzFeed News reports the Whitehall analysis found growth over the next 15 years could be up to 8% lower than if the UK stayed in the EU. According to BuzzFeed, the report concluded growth would be lower in each of three different Brexit outcomes than if the UK had stayed in the EU.
The document is said to look at the likely impact of different scenarios. Brexit minister Steve Baker told MPs the document was at a "preliminary" stage and "requires further work".
Government sources say the UK will not be worse off, and its preferred bespoke trade deal option was not analysed. But Labour said it should be published and the SNP said it was a "watershed" moment in the Brexit process.
Conservative Brexiteers said previous predictions had been wrong and that this one had been leaked by someone wanting the "softest possible" Brexit. Eurosceptics said other forecasts had been wrong and this one should be taken "with a pinch of salt".
Labour called for the assessment to be published and debated in Parliament.
According to Buzzfeed, the leaked document, titled EU Exit Analysis - Cross Whitehall Briefing and drawn up for the Department for Exiting the EU, suggests almost every part of the economy would suffer.According to Buzzfeed, the leaked document, titled EU Exit Analysis - Cross Whitehall Briefing and drawn up for the Department for Exiting the EU, suggests almost every part of the economy would suffer.
But Conservative MP and leave campaigner Iain Duncan Smith told the Today programme the paper should be taken "with a pinch of salt" as almost every single forecast on Brexit has been wrong. It looked at scenarios ranging from leaving with no deal to remaining within the EU single market.
"It's an incomplete report... deliberately leaked because it gives a bad view," he said. Responding to an urgent question, Mr Baker said the document was "not anywhere near being approved by ministers" and that ministers in his team had only just seen it.
The paper is likely to sharpen the debate in cabinet as the least bad option appears to be to remain close to the EU - the "Philip Hammond option", said the BBC's assistant political editor, Norman Smith. He described the document as a "preliminary attempt to improve on the flawed analysis around the EU referendum" and said it did not asses the government's preferred option of a bespoke free trade deal.
But the broader impact on the political debate was questionable, he added, as the public have so far proven "remarkably resistant to these warnings of economic woe". It "does not yet take account of the opportunities of leaving the EU", he said.
The report suggests UK economic growth would be 8% lower than current forecasts, in the years ahead, if the country left the bloc with no deal and reverted to World Trade Organisation rules. 'Highly embarrassing'
'Significant caveats' Responding to calls for it to be published, Mr Baker said MPs would get as much information as possible when they vote on the final Brexit deal but said: "We don't propose to go into these negotiations having revealed all of our thinking."
And as Brexiteer MPs hit out at the leaking of the document, he said there was "clearly" a campaign to overturn the 2016 EU referendum by some people in the media and the House of Commons.
One Conservative MP, Antoinette Sandbach, told Mr Baker she took exception to being told it was not in the national interest for her to see the document.
And responding for Labour, Brexit spokesman Sir Keir Starmer said the emergency of the report was "piling absurdity on absurdity" with the government having previously denied the existence of Brexit impact assessments.
Scottish First Minister Nicola Sturgeon said: "For months, Theresa May's government have refused to produce any detailed analysis of the potential impact of various Brexit scenarios - now we know why they have so desperately engaged in a cover-up."
The BBC understands the Treasury contributed to the document but sources say it is part of a much wider range of work going on in Whitehall.
The report suggests UK economic growth would be 8% lower than current forecasts, in 15 years' time, if the country left the bloc with no deal and reverted to World Trade Organisation rules.
It says growth would be 5% lower if Britain negotiated a free trade deal and 2% lower even if the UK were to continue to adhere to the rules of the single market.It says growth would be 5% lower if Britain negotiated a free trade deal and 2% lower even if the UK were to continue to adhere to the rules of the single market.
All scenarios assume a new deal with the US.All scenarios assume a new deal with the US.
The government sources point out that the document has not modelled the effect of a bespoke deal covering trade and financial services - the government's preferred scenario - and it does not attempt to anticipate the outcome of negotiations. Conservative MP Philip Davies blamed the report on "London-centric remoaners" in the civil service "who didn't want us to leave the European Union in the first place and put together some dodgy figures to back up their case".
The BBC understands the Treasury contributed to the document but sources say it is part of a much wider range of work going on in Whitehall. Earlier Conservative MP and leave campaigner Iain Duncan Smith told BBC Radio 4's Today programme the document should be taken "with a pinch of salt" as almost every single forecast on Brexit has been wrong.
The source said: "An early draft of this next stage of analysis has looked at different off-the-shelf arrangements that currently exist as well as other external estimates. A government source said the report "contains a significant number of caveats and is hugely dependant on a wide range of assumptions".
"It does not, however, set out or measure the details of our desired outcome - a new deep and special partnership with the EU - or predict the conclusions of the negotiations.
"It also contains a significant number of caveats and is hugely dependant on a wide range of assumptions."
The chairman of the European Research Group of Conservative MPs, Jacob Rees-Mogg, said that economic modelling so far had been "highly speculative" and often inaccurate.
Similar analysis carried out by the Treasury ahead of the Brexit referendum predicted large scale job losses if there was a vote to leave and had been "comprehensively wrong", he said.
But Sadiq Khan, the Labour mayor of London, said it showed the need for the government to "urgently change course" and make staying in the single market and customs union its top priority.
The SNP also called for continued single market membership, saying the "highly embarrassing" leak was "not surprising".
Meanwhile, International Trade Secretary Liam Fox has denied telling Tory Brexiteers to prepare for disappointment.Meanwhile, International Trade Secretary Liam Fox has denied telling Tory Brexiteers to prepare for disappointment.
Speaking to The Sun about pressure on Prime Minister Theresa May, he criticised Tory MPs involved with negative briefings, saying "nothing that would happen would change the parliamentary arithmetic".Speaking to The Sun about pressure on Prime Minister Theresa May, he criticised Tory MPs involved with negative briefings, saying "nothing that would happen would change the parliamentary arithmetic".
"We don't have a working majority, other than with the support of the Democratic Unionists, and we need to accept the reality of that. I know that there are always disappointed individuals but they're going to have to live with disappointment.""We don't have a working majority, other than with the support of the Democratic Unionists, and we need to accept the reality of that. I know that there are always disappointed individuals but they're going to have to live with disappointment."
Mr Fox told the BBC his warning was to Mrs May's critics that they will be "disappointed" in their efforts to topple her or secure cabinet positions for themselves.Mr Fox told the BBC his warning was to Mrs May's critics that they will be "disappointed" in their efforts to topple her or secure cabinet positions for themselves.