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Sir Humphrey’s conclusion - Brexit is going to hurt after all

 
Infinox Contributor
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Sir Humphrey’s conclusion - Brexit is going to hurt after all (Source: Getty)

The famously verbose Sir Humphrey - the civil servant star of Yes Minister - was a master at sugarcoating things.

Yet his real life equivalents - Whitehall’s top civil servants - pulled no punches in a leaked analysis of the impact Brexit will have on Britain’s economy.

The searing assessment imagined a worst-case scenario and concluded that UK GDP could be 8% lower in the 15 years following Brexit than it would be if Britain remained in the European Union (EU).

The analysis - which the government says doesn't take into consideration a bespoke deal - says Britain would still be 5% worse off even if it managed to negotiate a free trade deal with the EU by the end of 2020.

Even under the “best” possible scenario - which would see the UK continue to abide by the rules of the single market - Britain’s economy would still be 2 per cent worse off.

All scenarios assume a new trade deal with the US, which is far from guaranteed.

Government sources insisted the document had not modelled the effect of a bespoke deal covering trade and financial services - the government's preferred scenario - and that it did not attempt to anticipate the outcome of negotiations.

Does this really matter? Surely this cross-Whitehall briefing document provides all the necessary evidence that Brexit is likely to hurt the economy under any circumstances.

Lack of clarity

Such brutal honesty - thought never intended for public consumption - is welcome.

After all, City grandees are still waiting for a detailed government position paper covering financial services that they were promised last Autumn.

And it is the absence of information that is creating problems, not just in terms of the impact of Brexit on Britain’s economy but also Britain’s negotiating position.

Little wonder that German Chancellor Angela Merkel told journalists and delegates at the World Economic Forum last week that she keeps asking Theresa May “Tell us what you want” to which she apparently keeps receiving the baffling reply of “Make me an offer” from the Prime Minister.

To be fair the impact assessment doesn’t factor in the benefit that may come from a non-EU Britain’s freedom to strike trade deals with other countries, or whether this may make up for any fall in post-Brexit GDP.

This is mostly because Brexit remains a step into the unknown. It is impossible to forecast how much additional trade with the likes of Australia, India and wherever else Liam Fox might try to negotiate trade deals in the next few years, will boost UK GDP.

Bleak though this unvarnished Brexit analysis may be, it does appear to provide at least one concrete answer from the government to one fairly straight forward question. Yes, Brexit will hurt the UK economy. The question now is how much.

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